Cargo Liability vs. Freight Insurance:
Know the Difference
If you have shipped freight, chances are you have had to file a claim for loss or damage to your shipment. It is the unfortunate reality of shipping. It is not a matter of if damage will occur but when damage will occur. When your shipment arrives damaged, your first thought is probably, “How will I recover from this?” The answer depends on whether your shipment is insured by motor truck cargo liability or freight insurance. It is important to know the difference.
Motor Truck Cargo Liability
The motor carrier, or trucker, provides some level of cargo liability to each freight shipment. The level of liability is determined by the type of commodity being shipped and provides coverage up to certain dollar amount per pound. In most cases, the trucker’s cargo liability is much less than the actual value of your freight. Common cargo liability limits are $0.50 per pound for less-than-truckload (LTL) shipments or $100,000 for full truckload (FTL) shipments. When you schedule your freight shipment, figure out how the trucker’s liability is limited to ensure that your freight is covered adequately.
If your freight is damaged or lost, you must file a claim with the carrier to prove they are at fault for the loss or damage. If you are relying on the trucker’s cargo liability, you should know that acts of God (ie. lightning, flood, etc.) are excluded. There are also often exclusions for improper packing, so you will want to be well-versed in the NMFC packaging guidelines. In these scenarios, the trucker is not at fault, so their motor truck cargo liability will not respond to the claim.
Freight insurance is often referred to as shipping insurance, per load cargo insurance, spot cargo insurance, trip transit insurance, spike cargo insurance, single trip cargo insurance, moving insurance, and cargo rider insurance. Freight insurance through FreightGuard is an affordable way to protect your freight from loss or damage during transit. Freight insurance does not require the trucker to be liable for the loss or damage to provide coverage.
Freight insurance premiums vary based on several factors. These include:
- Type of commodity being shipped
- Value of the freight (Valuation is typically based on Cost + Insurance + Freight +10% markup.)
- Mode of transit (truck/air/ocean)
- Packaging type (professionally packed or non-professionally packed)
Shippers can purchase freight insurance from our website. Most importantly, there are often rate discounts for high volume shippers. FreightGuard offers a 10% discount on every third online cargo coverage purchase.
How to Purchase Freight Insurance
International and domestic freight shipping insurance can vary among insurance carriers. It is important to work a professional insurance agent for your cargo insurance needs. FreightGuard has relationships with some of the leading freight insurance carriers. We shop for the right coverage to fit your shipping insurance needs.
FreightGuard works with individuals, small businesses, and freight brokers. We work with our carriers to insure general merchandise, household goods movements, and hard to place risks like artwork, automobiles, and electronics. We shop quotes with all of our freight insurance companies to ensure you are getting the best coverage for your price range.
Between booking your shipment and getting it ready for pickup, you have your hands full. FreightGuard makes purchasing shipping insurance quick and easy. Once you have booked your shipment and have your bill of lading or load confirmation, you can purchase insurance in one of two ways:
- Online at www.freightguardnow.com. – You can quote, purchase, and print your freight insurance certificate all online in less than 5 minutes! All you need is your shipment information and a credit card.
- Call FreightGuard at (866) 748-4200. – Provide your shipment information, and our licensed professionals will do the work for you. We deliver your insurance certificate by fax or email in less than 20 minutes!
Why Choose FreightGuard
FreightGuard has been providing insurance for your cargo shipments since 2007 with leading freight insurance companies. FreightGuard’s licensed insurance professionals help you find the best freight insurance for your needs at the right price. Whether it be one single shipment or a large project, Freightguard is here to help!