Freight Insurance Guide: Cargo Insurance vs. Carrier Liability

What Is Carrier Liability?

Carrier liability is the legal obligation of the trucking company to pay for freight loss or damage caused by their negligence. Under the Carmack Amendment, carriers are liable for the full actual value of goods lost or damaged — with exceptions. Those exceptions include Acts of God, shipper negligence, inherent vice of the goods, public enemy, and act or default of the shipper. Carriers can also negotiate reduced liability rates in their tariff.

What Does 'Released Value' Mean?

Some carriers offer discounted rates in exchange for a 'released value' — a limit on their liability per pound (e.g., $0.50/lb for standard dry van). At that rate, a 20,000 lb shipment worth $100,000 would only recover $10,000 in the event of a total loss. Always confirm whether a rate confirmation includes a released value limitation before shipping high-value freight.

What Is Freight Insurance (Cargo Insurance)?

Freight insurance (also called cargo insurance) is a separate policy that covers the full market value of your goods during transit, regardless of carrier fault. It covers losses due to accident, theft, weather damage, and other perils not always covered by carrier liability. IZY Logistics can arrange freight insurance through third-party providers — ask when requesting your quote.

When Do You Need Additional Freight Insurance?

Consider purchasing freight insurance when: (1) Shipment value exceeds $100,000; (2) You are shipping high-value electronics, pharmaceuticals, or luxury goods; (3) The carrier has negotiated a released value limitation; (4) Your freight is particularly susceptible to damage (glass, machinery, produce); (5) You are moving extremely high-value freight where total loss would be catastrophic.

How to File a Freight Claim

Document damage immediately at delivery — note exceptions on the BOL before the driver leaves. Take photographs of damaged freight and packaging. File a written claim with the carrier within 9 months of delivery (Carmack Amendment requirement). IZY Logistics assists all clients with claim documentation and carrier negotiation. A well-documented claim is almost always resolved — an undocumented one rarely is.