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Who is liable when freight is damaged or stolen? What insurance freight brokers carry vs what you need as a shipper. How to protect your freight.
When freight is damaged, stolen, or lost, shippers often discover that the protection they assumed they had does not exist. Carrier liability is limited by law. Broker liability is even more limited. Here's the honest breakdown of who pays what — and how to protect yourself.
Under the Carmack Amendment, carrier liability for freight damage is limited to the 'actual value' of the goods at the time of shipment — but carriers can further limit liability in their tariff. Many carriers limit liability to $0.10-$2.00 per pound. A $50,000 pallet of electronics weighing 1,000 lbs could only recover $200 under a $0.20/lb limitation.
Freight brokers are not liable for cargo loss or damage under the Carmack Amendment — that liability rests with the carrier. Brokers can be liable for: negligent carrier selection (choosing a carrier with a known poor safety record), misrepresentation of carrier credentials, and breach of contract with the shipper. This is why carrier vetting matters so much.
Every licensed freight broker must hold a $75,000 surety bond. This bond covers broker fraud and financial misconduct — it does not cover cargo loss or damage. If a broker collects your freight payment and never pays the carrier, the bond covers that. If your freight arrives damaged, the bond does not apply.
If your freight value exceeds carrier liability limits, you need cargo insurance — either through your freight broker's contingent cargo policy or your own shipper's interest policy. Contingent cargo insurance (most brokers carry $100,000-$1M) pays only when the carrier's insurance fails. Your own shipper's interest policy pays regardless. For high-value freight, always purchase your own.
IZY Logistics carries contingent cargo insurance and requires all carriers in our network to carry minimum $100,000 cargo coverage and $1M liability. We vet every carrier before booking and maintain documentation. We also assist with freight claims and do not abandon shippers after a loss event. MC #1615290. Call +1(877)IZY-LOGS.
IZY Logistics is a licensed freight broker (MC #1615290) with dedicated dry van, reefer, and flatbed specialists, serving shippers across all 48 states. Get a competitive quote in under 30 seconds.
Get a Free Quote →Freight broker liability and insurance affects how smoothly a shipment moves and how much visibility a shipper has into the process — it's worth understanding before booking.
IZY Logistics is transparent about freight broker liability and insurance with shippers upfront, before a load is booked, rather than leaving it to be discovered later.
Yes, in some cases. Freight broker liability and insurance can work differently depending on whether you're working with a broker's carrier network or a company's own trucks.
Reach out directly to IZY Logistics — questions about how a shipment will be handled are best answered before booking, not after.
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