For Shippers : Cargo Claims/Insurance : Be Aware of the Standard Terms and Conditions of your Freight Provider

When it comes to shipping cargo, cargo insurance and cargo claims is almost an afterthought. It is one of those things that most shippers don't seem to think about until it happens. And, just like in your personal life, it is always best to think about insurance BEFORE something bad happens.

One of the areas that shippers tend to find the most trouble and confusion with is cargo insurance, particularly cargo claims. It continually surprises me when customers call me to inform me that they received some damaged product and expect our company to reimburse them in full. And then their resultant frustration and anger when I inform them that unless they bought cargo insurance - which we always recommend to all our shippers - then we are only liable for the maximum liability as per the terms and conditions of our waybill.

Here is some valuable information and advice for all shippers out therebefore you tender a shipment to your freight provider :

1. Do you have cargo insurance ? Most larger companies have cargo insurance included as part of their overall coverage. Check with your insurance provider to confirm if you have cargo insurance coverage and if not, the cost. If you do not have cargo insurance coverage, then your freight provider can easily provide it for you on a shipment per shipment basis. Costs and terms vary widely depending on your freight provider, so check with them carefully to ensure you understand the rates and terms and conditions of their cargo insurance coverage.
2. Regardless of whether you have your own cargo insurance coverage or not, before you get all excited and sign that incredibly cheap contract with your new freight provider, STOP and ask them what their standard terms and conditions are for all modes of transportation in the case of damage or loss. Most reputable companies have this information printed on their waybills, usually the back, explaining clearly their maximum liability in the case of damage or loss and the conditions that apply. Get blank copies of your freight provider's waybills and read them carefully to ensure that you are comfortable with their liability terms and conditions.
3. If you experience damage or loss with a shipment, STOP! Before you sign off that delivery receipt, mark down any and all damage or loss incurred. Contact your freight provider immediately in writing explaining clearly the condition of your shipment, when you first noticed the damage or loss, and indicating that you would like to process a claim with them. If your freight provider does not respond, follow up with them until they do. Your freight provider should advise the next steps to process your claim.
4. IMPORTANT : make sure that you file your claim within the guidelines of the terms and conditions indicated by your freight provider's waybill or other written terms and conditions. This is very important and one of the biggest reasons claims get denied. Almost always there are time limits defined in the terms and conditions and if you do not notify the freight provider within those time limits, then your claim will almost surely be denied.
5. If you have your own coverage through your insurance provider, be sure to notify them same time that you notify your freight provider.
6. IMPORTANT : you should be very clear that damage or loss incurred on a shipment does not absolve you of payment of freight charges. This is easily the most common misconception that shippers have about freight carriers. No freight carrier on earth is going to settle your claim unless you have paid the freight charges. Often when damage or loss occurs, the first and common reaction is frustration and anger, and your thoughts probably run along the lines of "forget my freight provider, I am not paying the bill". Please keep in mind that if you do this or threaten to do this, you are simply delaying settlement of your claim.
7. Always keep track of dates and documents and when you sent them, who you spoke to, etc.
8. Remember : if you did not insure your shipment with your freight carrier, then you will only be getting a settlement that adheres to your freight provider's terms and conditions as per their waybill. For example, most domestic freight carriers carry a maximum liability of only $ 0.50/lb. That means for a shipment of 1,000 lbs you will only be getting $ 500.00 - and that is ONLY if your freight provider is at fault and agrees to honor your claim.

My company always strongly urges our clients to insure their shipments, either through their own insurance carrier or with us on a per shipment basis. It costs very little to insure a shipment that if damaged could cost you your client or your business. Be smart, insure your shipments and check carefully with your freight provider to ensure that you understand clearly their maximum liability and terms and conditions in the case of a damage or loss.