Understanding the Claim Process: Part I

Fact or Fiction: Carrier Limits of Liability.
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It’s not a particularly fun topic to study up on, but knowing the ins and out of damage and claims before it happens can help save you a lot of headache, time and potentially money down the road. So for the next 8 weeks, we’ll be delving into some of the most common issues that our customers face when it comes to claims. What’s first on the docket? The clear-as-mud topic: Carrier Limits of Liability.

Limits of Liability
There are a lot of facts, falsehoods and not-so-true conceptions swirling around the topic of Carrier’s Limits of Liability. We’re going to break down the statements we hear from the most and separate truth from fiction.

Statement #1: The full value of my goods will be paid in the event of damage, so long as the value of my shipment doesn’t exceed the stated standard limits of liability.

FALSE. All carrier’s establish their own limits of liability in their rules tariffs.  These limits are the amount (usually per pound) that a carrier will pay up to on any claim.

Many carriers state liability limits that vary based on class, condition (new, used or refurbished), packaging type, or commodity.  For example, a carrier may have a stated liability of $10/lb for class 100.  However, if that class 100 item’s condition is used, it may only have a carrier liability of $0.10/lb.  AND, many carriers also have long lists of specific commodities that have even further reduced liability limits such as electronics, odd size items, furniture, etc.

Because of these specific restrictions that can reduce liability, don’t assume that the stated standard liability means that your shipment is “covered.”

Statement #2: I put in my shipment information in Unishippers’ TMS and it displayed the limits of liability – so that is what the actual limits of liability are.

NOT EXACTLY. The Unishippers TMS displays the standard liability for the quoted class only – it does not take into account any special commodity restrictions. Therefore, if you have unusual or especially valuable, fragile, or odd shaped/sized items, we recommend you contact your Unishippers office to make sure there are not liability restrictions or reductions for your particular shipment.

Statement #3: The loss or damage to my shipment was so extreme. Surely, I must be entitled to more compensation than the stated limits of liability.

FALSE. While it may seem unfair that your shipment was dropped off the back of a liftgate and you’re not being paid the full value, the carrier is still only liable for the stated amount.  (This is why we recommend shipment insurance, read up on why it’s different here.)

Statement #4: My shipment was damaged and my amount lost is more than the carrier’s limits of liability. I’d like to file a claim for more than the stated liability amount, but I won’t because my claim will be denied if I do. 

FACT. If a shipper files a claim for more than the carrier’s stated liability for that shipment, the carrier will deny the claim or make an offer for the correct amount.  If a denial letter is received, it’s then up to you to submit an amended claim for the correct amount, but it’s especially critical to understand the carrier’s limits before escalation to avoid spending time pursuing an invalid claim.

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Your Guide to Understanding the Claim Process: Part I
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