When freight is damaged in transit we're often aggravated by the claims process. The most common complaints we hear are the amount of time it takes for a resolution, and the loss not being 100% covered. This is especially true when working directly with a common carrier. Motor carriers are liable for loss or damage unless it can be proven they weren't at fault. It's important to note that they cover these losses directly and do not use actual insurance coverage.
The carriers have the right to limit their liability and we're finding that they're increasingly taking advantage of this. Of course, they're only liable up to the actual value of the cargo but they commonly limit the liability based upon the nature of the cargo tendered:
By Class – The lower the class, the less coverage provided. Class 50 often receives only $1.00 per pound. Class 100 may only receive $5.00 per pound.
By Commodity – Articles prone to damage, such as compressors and household appliances, are often subject to very low liability limits such as just $1.00 per pound.
By Shipment Type – Volume quote and other spot quotes are usually limited to $1.00/lb. Used articles are usually limited to $0.10/lb.
By All Types – limit liability on all shipments to a maximum of just $5.00/lb. In fact, some carriers limit liability to just $0.50/lb for all shipments.
An excellent solution to the quandaries presented by limited carrier liability is Shipper’s Insurance. Globaltranz recently partnered with Cargo Shield to offer insurance via Roanoke Underwriting. Shipper’s Insurance provides many benefits over standard LTL carrier liability limits, Including:
It is real insurance – The liability coverage offered by LTL carriers protect them from claim payout in the event the loss or damage deemed out of their control. Cargo Shield’s insurance is actual “all-risk” that covers events such as floods and hurricanes. And it covers your freight up to the actual value you request, providing protection over and above LTL carrier limits.
Highly economical – Insurance for LTL shipments is incredibly economical for the protection offered.
Greater coverage – Coverage for up to $3,000,000 can be obtained. This is much more than the typical $100,000 and $25.00 per pound maximum that LTL carriers offer.
Covers shipper invoice value – Insurance covers the shipper invoice value. LTL carriers only cover up the cost of goods sold.
Confidence of coverage – With shipper’s insurance, there is no mystery as to how much coverage you have. Insurance will cover up to the requested amount (but not more than actual value), with no surprises on limits. The policy clearly defines all exclusions and exceptions. LTL carriers limit their liability in multiple and confusing ways. And they make frequent adjustments to these limits which are difficult to track and lead to unfortunate surprises.
Fewer Prohibited/Excluded Commodities – Insurance excludes far fewer commodities from coverage than what the typical LTL carrier excludes. And rather than tracking these exclusions across multiple carriers, customers can simply refer to the excluded list contained within the issued Insurance policy.
Faster claims processing – Cargo Shield will pay or settle claims much faster than the typical LTL carrier. In fact, we are seeing claims resolved at least 25% faster.
Consistency of claims handling – Rather than dealing with the varying claims processing methods and actions of multiple carriers, Cargo Shield provides one simplified, uniform, and consistent claims process.
Be sure to include the total value of your shipment when getting quotes and booking shipments. You'll find the low cost of this new coverage is well worth the investment.