Who Has Ultimate Responsibility To Properly Insure Your Goods When Moving On A Truck?

Who Has Ultimate Responsibility To Properly Insure Your Goods When Moving On A Truck?

Is It The Shipper or Logistics Provider?

There are several schools of thought as to who is responsible for properly insuring the loads that are given to logistics providers (logistics providers consist of 3PLs and carriers).

Shippers may assume that the logistics providers always fully insure the goods, but this assumption is incorrect. In most cases, trucking companies cover goods on a per lb. basis and the details of this can be hidden in their tariff. This is your shipment, so it is your responsibility to ask for your shipment to be fully covered. Top-tier 3PLs, like Diversified Transportation Services, will have third-party shipping insurance options. However, it is still the shipper’s responsibility to ask for supplemental insurance of goods if the product exceeds the standard per lb. coverage. Don’t wait until it’s too late to find out that your shipment is not covered for the full value.

Never Assume You Are Covered...

Always ask about third-party shipping insurance and get it in writing. When dealing with a 3PL, since they are not ever in possession of the freight they are not required to pay freight claims. Typically, they assist in the process, but it does vary by 3PL. (At DTS, we help in the claims process, working through the details and helping to ensure that what you get is fair in the event of a claim. Feel free to call us with any questions regarding claims and or insurance questions.) You will want to find out exactly how much coverage the contracted carrier has and ask about supplemental coverage if needed. If you are using a 3PL, just ask your representative what you are covered for on a specific carrier and they will tell you. At DTS we want to protect our clients’ goods when in transit, so we have options regarding cost-effective supplemental insurance. It is your freight, and it could be your loss if underinsured. So always ask.

Logistics providers know that it is the ultimate responsibility of the shipper to either validate that their specific shipment is covered based on the negotiated insured value with that provider or to advise that they need added coverage.

The Proper Procedure...

The proper procedure is for you, the SHIPPER, to make the logistics provider aware of the value of the goods and that you want them insured for a specific dollar amount.  It is the shipper's responsibility to ask for their shipment to be fully covered.

If you're a shipper it is this easy, "please insure load 999999 for $xxxxx dollar amount.  How much extra is it to fully insure that load, at that valuation in the event of loss or damage?"  At that point, the logistics provider will give you a price and you can accept that dollar amount to cover your goods or choose to pass on the insurance and assume the risk at your peril. Additional insurance can be purchased and is extremely cost-effective in most cases.  At DTS we work with our clients to ensure that their goods are protected in the event of damage or catastrophic loss, such as a trailer accident that occurs in bad weather.

If your current provider is NOT asking you for the value of your goods, they are not doing their due diligence in taking care of your valuable items.

5 Quick Tips To Help You Do Your Due Diligence And Ensure Your Shipments Are Properly Insured...

1. Do not assume your goods are automatically covered for full value.

2. Always ask, what am I covered for with regards to liability on this shipment?

3. Always get the covered amount in writing.  It can be as simple as an email from the logistics provider. (A verbal statement such as ---- You are covered for XXXXX over the phone typically does not hold up in court)

4. Never assume the logistics providers know the value of every shipment you send out.

5. It is the shipper's responsibility to ask for the goods to be fully insured and to provide that amount.

What Can DTS Do For You?

Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.

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