What’s the difference between liability and insurance?

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In the unfortunate situation that your shipment is lost or damaged, it’s important to know what is covered by liability and what is covered by insurance.

Every booked freight shipment comes with limited liability coverage. The amount of coverage is determined by the carrier and based upon the commodity type. It covers a certain dollar amount per pound of freight.  In some situations, the included liability coverage may be less than the value of the shipped goods.

To make a liability claim, the carrier must be at fault for the damaged or lost freight. However, if the damage is from inadequate packaging, loading errors or weather-related causes, the carrier is not at fault. Additionally, if the damage is not noted on the delivery receipt, many carriers will deny any liability.

In some cases, your freight shipment might have a higher value than what is covered under the included liability.  Freightquote offers additional insurance that can be purchased to cover the full value of the shipped goods. This extra insurance covers the shipped items and the cost of freight shipping. It is redeemable under all types of loss with no proof of fault required. Unlike the limited liability coverage, with added insurance, there are no exclusions for packaging errors or severe weather.

How do these two types of insurances differ in the claims process?

If your shipment is only covered by liability:

  • Your claim must be filed within 9 months of delivery, or within a reasonable time frame if lost
  • If the deliver receipt is not noted as damaged some carriers require immediate notification
  • You must provide proof of value and proof of loss
  • The carrier has 30 days to acknowledge a claim and must respond within 120 days
  • You must prove carrier negligence
  • This means the freight was picked up in good order, packaged properly but delivered in a damaged condition

If your shipment is covered by additional insurance:

  • You will be required to provide proof of value and proof of loss
  • Claims are typically paid within 30 days
  • You are not required to prove carrier negligence

Freightquote’s expert team of Brokers can help you decide what is best for each of your shipments and provide cost-effective additional insurance.  Contact Freightquote at 800.323.5441 to speak with a Freight Broker to ensure each of your shipments is booked to meet the needs and value of your freight.

3 responses to “What’s the difference between liability and insurance?

  1. Quite useful tips for everyone.Thanks for sharing with us
    http://www.gojmt.com/

  2. I find this post very informative. I have never really known the difference of the two until i stumbled upon this post. Thanks for a well written explanation.

  3. The bullets regarding for liability vs. insurance are right on the mark. Whether the carrier liability is too low or you want a quicker, simpler, claims process, insurance is an excellent choice.

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