Freight Insurance Vs. Freight Liability: What’s the Difference in the U.S.?

freight insurance U.S.When you ship out freight, you would be wise to insure the cargo in the event it incurs damage in transit. You ask: “Don’t carriers cover you automatically? The answer is both yes and no. We’ll discuss freight insurance and freight liability and how they differ.

Freight Insurance and Freight Liability Explained

Insurance and liability coverage are similar but not exactly the same. Federal law requires all truck transports to have basic liability coverage. Depending on your freight and personal assessment, this may or may not be adequate.

Basic liability coverage differs from carrier to carrier. It covers a specific amount of damage, usually calculated by a dollar amount for every pound of freight. The maximum coverage amount may be less than the monetary worth of the freight.

Coverage is usually limited to incidents that are deemed negligent on the carrier’s end. The carrier’s failure to properly secure the pallet once inside the truck or trailer is one example. Liability coverage typically doesn’t include other scenarios, such as theft or nature-induced damage.

What About Freight Insurance?

Insurance essentially covers most or all other scenarios that basic carrier liability doesn’t cover. This is optional, so it’s up to clients whether they wish to purchase additional coverage for their freight. The insurance is in effect from the time the freight leaves your warehouse until it reaches the destination. Insurance may also cover the freight while it’s sitting in overnight storage.

Coordinate with a Freight Broker

Contact us today at Machine Transport to schedule your next outbound shipping. All the carriers we work with follow federal laws regarding basic liability coverage. We can help you if you choose to apply for additional coverage. Freight liability and freight insurance protect your investment in the event of a devastating in-transit scenario.

Experts in Freight Insurance & Freight Liability Serving all 50 States

Serving the manufacturing industry in the U.S., Canada and Mexico


Posted on September 22, 2021 | Published by Ignite Local | Related Local Business