If you are a freight broker odds are that you have experienced a loss of a shipment, or damage to goods in your care and possession at one time or another. Even costly delays can result in claims and lawsuits relating to lost or damaged cargo. Problems can often arise due to the fact that the trucker’s motor truck cargo policy won’t necessarily respond to such a claim.
This is where contingent cargo liability brokers programs can be administered to address each freight broker’s unique circumstances, and ensure that proper restitution and resolution of the risks involved are satisfactorily resolved. Cargo insurance, known also as freight insurance, is the best way to protect customers from lost or damaged freight while it is being transported from destination to destination.
Carrier liability versus cargo insurance
All freight shipments come with some sort of limited liability coverage. This coverage is determined by the carrier and varies depending on the commodity type or freight class of the goods being shipped. Generally speaking, carrier liability will provide coverage up to a specified dollar amount per pound of freight. It’s not uncommon to find that the liability coverage is less than the actual value of the goods being shipped.
Since carrier liability only covers a certain dollar amount per pound of freight, if the freight has a higher value than what is covered by your liability insurance, cargo insurance from a contingent cargo liability broker may be very beneficial to you in order to better protect yourself from lost or damaged cargo.
Another benefit of purchasing cargo insurance is that you do not need to prove that the carrier was at fault for the lost or damaged items, only that the damage or loss actually occurred while the goods were being transported.
Contingent cargo insurance provides coverage which will indemnify and defend a load broker/transportation broker for the customer’s loss or damage to cargo where there is an allegation of liability on the part of your choice of carrier or for your perceived failure to carry out your due diligence in ensuring that the carrier has adequate insurance coverage. The contingent cargo liability policy will provide investigation, defense and indemnity for any claim provided it is the result of a covered loss.