Accidents happen, and natural events may impact goods while in transit. Freight claims are the method used to recover some of the loss. Understanding the difference between freight insurance and freight liability insurance is paramount to choose the coverage that is right for your clients’ business needs.
Freight insurance also called cargo insurance, does not require proof that the carrier was responsible for damage or loss of a shipment, only that it occurred. The cost is generally based on the on the declared value of goods being shipped. This is a much more accurate way to recover loss for heavy items than carrier insurance, which places a per pound value a shipment. Claim payments can typically be received within 30 days.
Freight Liability Insurance
This type of solution can cover the full value of the goods being shipped. Once the shipper has proven that a shipment was unreasonably late or delivered damaged, the carrier may be required to establish a carrier defense. If it fails to do so, the shipper may be entitled to the recover the actual shipment amount.
Freight carriers, property brokers and warehouse operators can purchase specialty coverage from freight liability insurance to freight forwarder coverage. Policies are designed to protect them against claims of damaged or missing freight. Coverage can be purchased to cover goods that are lost in transit via air, ocean rail and truck.
When you’re involved in the industry of transporting freight, it’s important to know the differences in insurance should you have to make a claim. Do you know what freight liability insurance is and how it differs from general freight insurance? Here are the main differences.
Liability coverage is applied to every freight shipment automatically. How much coverage is included is chosen by the carrier and based on the commodity being transported up to a certain monetary sum per pound of freight. The coverage doesn’t usually equal the full value of the goods and is worthless money if you’re pulling used merchandise. You should keep track of how much coverage is available so you’ll know if you need general freight insurance.
General freight insurance is added after freight liability insurance to cover what isn’t included in the original policy. This can make up the difference between the amount of coverage and the value of the goods. It can also cover the cost of shipping. With liability, you’re only covered if the carrier is negligent. Freight insurance covers you in a variety of other situations where you wouldn’t get your money back without the added policy.
If you transport goods on a regular basis, it’s a good idea to have freight insurance on top of liability insurance to cover a variety of mishaps. By knowing the difference, you’re off to a good start.
Unlike goods kept in a warehouse, freight-shipped products experience a variety of environments and challenges. This applies whether your goods are going across town or across the world. Freight liability insurance can ease your mind when your goods need to travel from one point to another. Here are some of the coverage options you need to know about.
If you are using a carrier service that is not directly related to your business, that could mean the driver does not love your product as much as you. Some liability insurance programs can cover you if there is carrier negligence involved in the damage of your goods. You may also recuperate your material expenses in certain cases of loss or outright destruction. Coverage rates vary, but getting back even a fraction of your material costs is better than getting nothing at all.
You have put a lot of time and money into your product, so it is essential that it arrives at its destination in good order. Freight liability insurance is a good way to get peace of mind regarding your goods as they travel out your door and to your distributors or customers. Whether traveling by truck, plane or boat, liability insurance is a good start to protecting your investment.