MFW Blog Posts
August 3, 2023
Unveiling the Truth about Limited Liability Coverage in Shipping: Your Cargo Deserves Better!
Carrier Limited Liability Coverage vs. All-Risk Shipping Insurance
When it comes to shipping goods, carriers offer what they call “Limited Liability” coverage, but the truth is, it falls far short of providing true insurance for the full value of your shipments. We understand how vital it is for you to be fully informed about this crucial aspect of shipping, so let’s get right into the details.
Limited Liability coverage, mandated by carriers, does offer some financial responsibility to customers in case of lost or damaged goods. However, there are significant limitations to this coverage. In most cases, carriers will only reimburse up to $100 for individual parcels or a mere fraction of the total weight value for larger freight shipments. And here’s the catch – they will only do so under certain circumstances and when you, the Shipper, can unequivocally prove that the loss was directly attributable to carrier negligence.
Let’s break down the customary maximum payouts for Limited Liability coverage in various shipping scenarios:
- Major Parcel Carriers: Maximum payout of $100 (customary)
- Ocean Carriers: Maximum of $500 per container (customary)
- Domestic Air Carriers: $.50 per pound (customary)
- Less-Than-Truckload (LTL) shipments: Ranges from $.10-$25.00 per pound with a customary payout of $.50 per pound
- Full-Truckload (FTL) shipments: Maximum payout of $100,000 (customary)
The limitations don’t end there. Under Limited Liability, you won’t find coverage for damage or loss resulting from common external factors such as Acts of God, theft, road incidents involving other drivers, spoilage, or anything else beyond the carrier’s immediate control. This means that even if your goods suffer due to these uncontrollable circumstances, you won’t receive any compensation unless you can establish carrier negligence – a challenging task in many cases.
Sadly, more than half of all Limited Liability claims are denied outright because shippers fail to meet the stringent burden of proving carrier negligence.
Your cargo deserves better protection and peace of mind during transit. Understanding the limitations of Limited Liability coverage empowers you to make the right choice for your shipments. Stay tuned to learn more about a reliable alternative that ensures your goods are covered for their full value, regardless of the circumstances. Your cargo’s security is our top priority!