Did you know that your less than load (LTL) or full truckload (FTL) freight quote might not cover the replacement cost of your shipment if it’s damaged while in transit? Many of our customers don’t, which is why we’re talking about what you need to know about shipping insurance.
From what is typically covered under an LTL shipping contract to what might not be covered, and how to remedy the problem, keep reading to learn about shipping insurance for LTL and FTL freight shipping. Then contact the team at Amware to learn how a full service third party logistics company can help lower the risk of your commercial shipping operation.
What is covered under a standard freight shipping contract?
Unfortunately, there isn’t an industry standard amount of coverage for freight shipping contracts and agreements. In fact, the amount and type of coverage varies greatly by freight carrier, as well as commodity. The average customary maximum payout limit under Limited Liability coverage for a LTL shipment is just $0.50 per pound. The payout ranges from $0.10 to $25 per pound, but the average is low enough to warrant taking a second look.
When coverage is included on the bill of lading, it’s likely the coverage isn’t simply value based, which means it’s possible that depending on the value of your shipment, the full cost of replacement or damage repairs may not be covered by the carrier’s freight insurance.
The best way to determine what is covered under your shipping contract is to read the bill of lading closely. If you have any questions, reach out to the carrier (or 3PL) and request their full insurance coverage terms in writing before releasing your shipment. Your product is valuable to your business, so why risk it to the unknown when an answer is a phone call away?
Upping the Ante, Lowering the Risk
Because so many freight carriers have low or inadequate freight shipping insurance for their commercial customers, many business owners and shipping managers are seeking supplemental coverage. Third party insurance, known as all-risk shipping insurance, makes it easy to lower the risk of freight shipping by offering enhanced coverage for freight shipments. This added cost is well worth the investment if a shipment is damaged or even lost.
Who needs all-risk shipping insurance? We recommend it to all of our customers shipping items that are either high value or fragile/easily damaged. While the cost of this coverage varies by commodity and shipment value, the peace of mind you’ll get knowing your business isn’t at risk in the event of someone else’s mistake is likely well worth the negligible cost.
Need help negotiating with carriers?
At Amware, we treat your shipments as though they’re our own, which is why we want you to know about what’s covered and what isn’t in the event of damage or loss. Want to know more about all-risk shipping insurance? Download the white paper below and learn:
- Is All-Risk Shipping Insurance Right for You?
- What’s Covered?
- Common Limits