If you are a frequent freight shipper, you probably already know that it’s not a matter of “if,” but “when” an accident impacts your cargo. There are a number of factors that could lead to lost or damaged freight shipments, such as inclement weather or damage in transit. Whether or not the mishap is within a carrier’s control, you do not want to be the person who overlooked shipment insurance.
Shippers often make the mistake of assuming that freight shipments are automatically insured by carrier limits of liability. The truth is that carrier liability is not the same as insurance and may not cover the full value of your shipment.
Before you decide to skip shipping insurance, let’s take a look at what carrier liability covers and how it may or may not protect your cargo.
What Carrier Liability Covers
Carrier limits of liability determine the maximum amount a carrier can be held liable for in the event of damage, loss or delays of shipments.
However, limits of liability vary based on the carrier, the condition and size of the item(s) being shipped, the packaging and the commodity class of the freight – regardless of the actual value of the shipment. In addition, carrier liability typically only covers damage or loss to the shipment that occurred due to the carrier’s negligence. In many cases, in order to settle a claim the shipper must prove that the damage was the carrier’s fault.
What ISN’T Covered by Carrier Liability
More important than what is covered by carrier limits of liability is what carrier liability does not cover. Under carrier limits of liability, carriers can’t be held responsible for damage or loss that occurred due to:
● An act of God, such as weather and disaster-related damage
● Interference by a public enemy of the U.S. or an act of war
● Improper packaging of cargo by the shipper
● Government action, such as a road closures, quarantines or trade embargoes
● The nature of the goods, such as produce, tobacco or medical supplies which are prone to spoil or become defective over time
There are also limits to the amount covered by carrier liability. Depending on the carrier, those can range from $.15 per pound to $25 per pound — which means there is often a gap between the reimbursement amount and the actual value of the shipment. So even if you feel confident that the carrier will take responsibility for the mishap, it’s still possible that you won’t receive the value of your shipment under the carrier’s limits of liability.
Why You Need Freight Shipping Insurance
The bottom line is this: If a carrier can prove that the damage to your shipment occurred due to one of the exceptions listed above, or if the value of your cargo exceeds the carrier’s reimbursement limits, you may be simply out of luck in recovering the full value of your shipment. The only way to ensure that you are reimbursed for the full value of your shipment is to get freight shipping insurance.
Unishippers has partnered with UPS Capital to provide our customers with robust shipping insurance to protect their freight shipments. Freight insurance through UPS Capital offers full and flexible coverage that applies to any carrier or mode of transport. Plus, we make it easy to add insurance right at the time you book your shipment.
Your Unishippers shipping experts can help ensure your shipment gets from point A to point B with the proper coverage and the peace of mind that comes from knowing your investment is fully protected.