Freight insurance can save you time and money on your damaged or lost freight. Sounds good, right? Surprisingly enough, we’ve learned at FreightPros that some of our customers aren’t aware of the option for this third party insurance. Hmmm… How to remedy this situation? Suppose we could write a blog about it…
To start, there are a few kinds of freight/cargo insurance including third party (additional) insurance, and the coverage carried by the freight carriers on a standard load. In truckload shipping the owner/operators will also likely carry a certain amount of insurance before they are booked on a load (unless they’re not properly vetted).
The insurance covered by the carriers is included in your freight quote and varies based on carrier and commodity. As the coverage is not purely value-based, and subject to the carrier’s insurance policy, there is the possibility that the carrier’s freight insurance will not cover the full cost of damage or replacement to a shipment. This brings us to our third party cargo insurance…
Third Party Insurance
Third party insurance offers greater coverage for shipments at an additional cost. The cost can vary based on commodity and the amount of coverage needed, but you’ll receive a specific insurance document with third party insurance, as well as greater peace of mind knowing that your shipment is covered in the event of damage or loss. As freight brokers, we suggest to our customers to use third party insurance if they are shipping valuable or fragile items regularly.
The final kind of freight insurance comes in truckload shipping, and is carried by the owner/operator as a prerequisite to picking up the load. Often this coverage is around $100,000, but that number can vary. As truckload shipping is very different from LTL, coverage is required for a legitimate truckload shipping quote in a more stringent way than typical less-than-truckload.
When it comes to shipping freight, damage is part of the program. This doesn’t mean that all or a majority of your shipments will be damaged, but we believe it’s always better to be safe than sorry. Correct planning and packaging can cut down on many damage issues, but sometimes things happen, and when they do it’s best to be covered.