Insuring Your Freight

It’s a cold hard fact: every now and then freight gets damaged. Transporting goods has inherent risks in it. Accidents, fires, natural disasters, operator error, theft – all are possible scenarios. If you’re a company that ships freight everyday, odds are you’ve encountered at least one of these at least once in your career.

The type of insurance 85 percent of small businesses rely on is what’s called carrier liability. This is the most basic coverage: It’s limited to 10 cents per pound of the shipment. It won’t exceed the invoice value of the shipment. Since the freight carrier provides it and the price is automatically included in the shipping rate, it’s subject to that specific carrier’s insurance policy and it’s often a knuckle-chewing experience just to file the claim, especially if you’ve never filed one in the past.

Before going on to the second kind of freight insurance, it’d be quite the disservice to leave someone rudderless in this predicament. Here are a few tips on how to best file your claim for the quickest, most hassle free payout.

Filing an LTL Freight Claim

If you’re a business relying solely on the freight carrier liability coverage, the essence of the right way to file a claim is to do it fast and efficiently. If you have a pallet of damaged goods, don’t wait a few days to report it to the carrier.

Start immediately by following these simple steps.

  1. Record the damage as soon as the freight is received. The consignee needs to sign and notate the damage on the POD (Proof of Delivery) or bill of laden. Otherwise, the carrier can claim that there’s no way to know the damage didn’t happen after the shipment was received. Make sure you also take several pictures of the damage, and from all angles.
  2. Go to the carrier’s website, download and fill out their claim documentation form. This is when having a freight broker comes in handy as the broker can help you through the process.
  3. Make sure you have documentation, such as an invoice, which states the value of the shipment. This will ensure you don’t get reimbursed at the cost to replace the freight but at the cost the customer would be paying.

Once you’ve achieved this, your bases are covered. Now it’s just a matter of time. Unfortunately, it won’t be the briefest span of time you’ve experienced. Freight carriers are never quick on the draw with paying out freight damages. It’s an unfortunate reality, but one that can be mitigated by you taking these steps and getting those damages document and the claim filed.

Private Insurance

This is the second kind of insurance available for your freight. It’s also referred to as third party cargo insurance. There are many companies that provide it and many rates that can be quoted, so make sure that if you’re going for this additional coverage, you shop around.

Here, it also helps to have a freight broker who can get you online quotes. If you’re a small company that ships infrequently or ships extremely fragile goods, it can be difficult to get affordable rates without the benefit of a freight broker.

Provide the broker with as much detail as possible. Insurance companies don’t like vague information. Things like the manufacturer’s name, the value of the goods, the exact destinations and your shipping history all become pertinent.

Lower Premiums

Having coverage with an insurance company over a freight carrier means lower premiums, since there’s generally a larger pool of coverage. It’d be like buying an apple from an apple orchard as opposed to buying an apple from a convenient store.

The third party insurance company also deals with the carrier directly, so you don’t have to, and they can generally retrieve the payout quicker.

Hopefully, this has untangled some of the snarls that can occur when contemplating freight claims and freight insurance. Of course, it’s a complex issue and we’ve yet to tease it all out. Stay tuned for more!

Action Transport, Inc. has been helping shippers move their freight for over forty years. As a family-owned company, we know the determination it takes to grow a successful business. It happens one decision at a time. Every chance to save money and not be skirted on customer service is a decision well made. Get an LTL, full truckload or rail quote for your next shipment right now and let us help you get moving!