Freight Insurance & Liability: Staying Covered


Freight damage and loss are simply a part of shipping, and it will inevitably happen to you. A damaged or lost shipment can have a major impact on your business’s ability to meet your shipping needs, and the time spent managing lost freight can end up disrupting other parts of your supply chain and costing you even more money.

It’s vital to have insurance and liability to cover your assets and avoid a drain of your resources. Continue reading to learn more about how to stay covered, and if you’re in need of freight shipping, a shipping broker, or inventory management system for your business, contact ShipCarte today.

Freight Insurance vs. Freight Liability

Knowing the difference between freight insurance and freight liability is the first step in obtaining the type and amount of insurance you need to stay protected.

Freight Liability

With freight liability, your refund is limited, and in order to receive compensation, the carrier must be found liable for the loss or damage. In order to be found liable, you must be able to prove that the damage done was the result of the carrier’s negligence. This means that your freight must be properly packaged and a signed delivery receipt on file, proving that you properly prepared your freight for transport.

Every freight shipment is covered by some sort of liability coverage, which is determined by the carrier. This coverage is based on factors such as commodity type and freight class, and it covers up to a certain dollar amount of damage. Carrier liability may also include limitations, such as damage due to “acts of god” (weather) or acts of the shipper (improper packaging or loading), which relieves them of fault and the requirement of paying out the insurance costs. The carrier will always try to decrease their costs, so you should not rely solely on carrier liability to protect your shipment.

Freight Insurance

While freight liability requires you to prove that the carrier was at fault, freight insurance does not. It also tends to cover the entire value of the shipment. Because freight insurance is more comprehensive, it’s often a better way for small businesses to protect their freight against and damage that occurs during transit.

If your freight is a higher value than what is covered by freight or carrier liability, it’s important to also get freight insurance to cover the difference. For example, carrier liability may only pay $.25 per pound for an item that may have a much higher value, and freight insurance can be helpful if the product is damaged or lost.

When to Make A Claim

Carriers want to be notified of a claim for lost or damaged property as soon as possible, however you have up to nine months from the date of delivery to file. If your claim is covered by freight insurance (rather than liability) it is typically resolved within 45 days. If it is covered by liability, it can take more time. Carriers have 30 days to acknowledge the claim and an additional 120 days to resolve it.

ShipCarte – Shipping Solutions

ShipCarte makes it easy to manage inventory and ship around the world. When you choose to utilize our shipping platform for your shipping needs, you not only get access to our cloud-based system, but you also get the support of a dedicated account manager. From envelope to box, our courier services have you covered. We have all the features you need to help your business grow:

  • Instant multiple quotes
  • Multiple carrier services
  • Generate and print carrier compliant shipping labels
  • Schedule pick up online
  • Track and trace your products

Contact us today to get started or sign up for a demo. You can also download our eBook, which contains more helpful information on our shipping platform and shipping solutions.