Freight Insurance

Freight Insurance

Shippers seek to maintain the integrity and value of their goods and cargo from its origin through the logistical chain to its destination. Part of that process involves relying on a carrier for transport and potentially relying on the carrier’s coverage in the event that cargo is damaged, stolen, or otherwise lost. Freight insurance, also known as cargo insurance or goods-in-transit insurance, grants protections beyond the compulsory liability coverage possessed by carriers, thereby mitigating a shipper’s commercial risks. To get a free quote on freight insurance, submit a request through our LaunchPad quote system. We’ll connect you to a knowledgeable agent that can walk you through your options and find the policy you need at a price that fits your budget.

Freight Liability vs Freight Insurance

To understand the importance of freight insurance, you must also understand freight liability coverage (also known as carrier liability). By law, carriers are required to hold some degree of coverage to account for their operating liability. Those requirements vary based on things like what they’re moving, how they’re moving it, and more. This ultimately amounts to an obligation of a certain dollar amount of coverage per pound of freight. While this coverage does allow carriers to pay shippers in the event of a loss, it only applies in instances of mishandling, negligence, or other error on the part of the carrier. It does not apply if the loss is related to:

• An act of God
• An act of a public enemy
• An act of the shipper
• An act of the authorities
• The inherent nature or vice of the goods themselves

Additionally, in the event of a freight liability claim, the burden is on the shipper to show that their cargo was delivered intact and then prove fault on the part of the carrier. But even beyond those limitations and the difficulty of filing a claim, the benefit provided by freight liability will often not be enough to cover the actual value of a shipper’s loss. As mentioned, coverage is set as a blanket amount by weight rather than scaling with the items being shipped. This becomes particularly noteworthy in the case of jewelry, electronics, or similar goods where value and weight are not proportional. A proper freight insurance policy benefits shippers by:

• Expanding coverage beyond carrier liability
• Not requiring shippers to prove carrier fault
• Matching coverage amounts to declared value of cargo

There are flexible options for the purchase of cargo insurance depending on whether a business wants ongoing coverage for shipments happening frequently and/or simultaneously or if they just need to insure individual shipments. If you have questions or would like more information on freight insurance, complete the quote request form for a free consultation.