Freight Shipping: Understanding Carrier Limits of Liability

Learn the limits and risks of carrier liability so you can better protect your freight shipping from loss or damage.
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If you are a frequent shipper, you probably already know that it’s not a matter of if, but when an accident will impact your freight shipping. There are a number of factors that could lead to lost or damaged freight shipments, such as inclement weather or movement in transit — but what factors fall under the carrier’s limits of liability?

Whether the accident was within the carrier’s control or not, you could risk losing money if you did not invest in freight shipping insurance. Shippers often make the mistake of assuming that their freight shipping is automatically insured under the carrier’s limits of liability. The truth is that carrier liability is not the same as insurance and may not cover the full value of your freight shipment.

Let’s take a look at what carrier liability covers and how it may or may not protect your freight shipping:

What Carrier Liability Covers
Carrier limits of liability determines the maximum amount a carrier can be held liable for in the event of damage, loss or delays to your freight shipping. 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.

Carrier liability typically only covers damage or loss 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. Perhaps the biggest limit to carrier liability is that there is no official deadline to settle a claim, allowing the process to drag on for months. To learn more about successfully filing a freight claim, download Unishippers’ Roadmap to Freight Claim Success.

What Is NOT 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 occurs due to:

  • An act of God, such as inclement weather or natural disaster
  • 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, limits can range from $.15 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 full value of your freight 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 simply be out of luck in recovering the full value of your shipment. The only way to ensure you are reimbursed for the full value of your shipment is to purchase freight shipping insurance.

Unishippers has partnered with UPS Capital® to provide our customers with robust freight shipping insurance to protect their 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 with Freight Manager™, our easy-to-use transportation management system.

Your Unishippers shipping experts can help ensure your freight shipping 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. Contact Unishippers today to get started.

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