The Cost of a Freight Claim and
Tips on Insuring Your Cargo
The Importance of Insuring Your Cargo
In the shipping industry, the goal is always to safely deliver cargo to its final destination, whether it’s across North American or around the world. We all know, however, that unforeseeable events can happen during transit that causes damage or loss of freight. From a collision on the road, to cargo theft at a warehouse, to damage caused by incorrect packing, or even a natural disaster – you never know when you may have to file an insurance claim. That’s why it’s so important to ensure your cargo is covered.
Minimize Your Risk and Save Money in the Long Haul
Freight insurance protects the shipper from a potentially dramatic financial loss. Consider that the global financial loss due to lost or damaged freight is estimated to be over 50 billion dollars a year according to the National Cargo Security Council. There is no question that this has a significant impact on businesses and their bottom-line. If an incident does occur, the typical carrier liability covers just $2.00 per pound on lost or damaged cargo. So, for 1000 pounds of cargo you’ll recoup just $2,000.
Full Value Insurance
The Owner of Freight Fox, Mo Afshari, explains that accidents can happen whenever you ship. “It doesn’t happen often, but when it does, it’s always good to know that you will be compensated more than what the carrier is legally responsible for.” As a broker and forwarder he offers a policy through an insurance company that provides full value insurance with no deductible for clients. He explains, “Often times, the shipper may only require this type of insurance on a few of their shipments.” It is typically not necessarily on all of their shipments. This is beneficial when a client is shipping something that may be of high value or a “handle with care” item. As a freight broker they can manage the claim process for you, in order to save companies time and valuable resources.
Tips on Filing a Claim
File your insurance claim immediately as there is a set amount of time for carriers to acknowledge the claim after a file has been made. Remember that laws surrounding insurance claims vary between the United States, Mexico, and Canada. The point of origin is where your particular claim will be settled. So, if you are shipping from the US to Canada, for example, USA regulations and laws would apply to that claim.