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Limited Liability versus Cargo Insurance

The advantages of booking LTL freight through a logistics broker has many benefits, such as lower freight rates without volume commitments and a wide variety of carriers to choose from.  However, it's important to understand the LTL carriers provide "Limited Liability" coverage which is not cargo insurance.  The limits have little to do with the actual value of your freight and can be as low as $0.10 cents a pound.  Different from Truckload carriers who include Cargo Insurance, LTL carrier do not provide Insurance unless specifically purchased with each shipment.


Below we go into detail how to protect your cargo while in transit with Truckload or LTL Carriers.

If an LTL shipment is damaged or lost, the carrier will reimbursement only to the “limit” of the carrier's liability, regardless of the actual freight value.  Under discounted rate programs each carrier has its own rules and Limits of Liability, based on weight, class and commodity.  Their limits average $1.00 - $5.00 per pound and as low as $0.10 cents a pound when booking under a spot volume quote (5+ skids) or for used goods.  This mean a 1,000-pound pallet could have $100 of limited liability coverage.  The burden is on you to prove carrier negligence.  Even if the freight is obviously damaged, the shipper must prove the freight was packaged well enough to withstand the rigors of transit across bumpy roads, abrupt traffic stops and repeated handling across multiple docks. The carrier may require photographs of your freight before it was loaded. Carriers can decline coverage for a variety of reasons, such as act of God (Weather related) or act of shipper (improper packaging, insufficient banding or wrap, over-stacking, too tall, too heavy, cracked pallets, etc).  And even in the best cases, the carrier can still deny responsibility.


Assuming your broker will cover the cost or “make up the difference” is not a viable solution and short paying the brokers invoices may have unintended consequences. You can lose a good Logistics partner. Credit Reporting agencies make this information readily available to the shipping marketplace and other brokers. This can result in higher prices as the marketplace views your company as high-risk.


We do not want that to happen.


Instead, let us help you.

Solution - Shippers Interest Cargo Insurance

Shippers can purchase Primary Cargo Insurance to cover the full value of their freight on a per shipment basis for both LTL and TL shipments. The shipper is not required to prove carrier negligence and settlements are usually paid within 30 days. 


SLC Nationwide provides several programs to purchase insurance. Costs are reasonable priced as cents per $100 value for most commodities. 


Example:  freight valued at $20,000 could be insured for as little as $60.


(This is an estimate and there are exclusions, please ask your Logistics Coordinator)

*Download the white paper here*

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