Cargo Insurance Guidelines

As an owner/operator or fleet motor carrier, there are several things to consider when making a decision about insuring your load. Key determining factors are the mode of shipping, the linehaul (the pick-up and delivery points), the types of commodities you will be transporting and the value of the shipment. Please see the Federal Motor Carrier Safety Administration (FMCSA) complete list of forms and guidelines of liability insurance relative to obtaining operating authority: http://www.fmcsa.dot.gov/registration-licensing/licensing/registr.htm Consider these objectives: Standard Liability Coverage – Your load will be covered under FMCSA standard legal liability which you must have as an operating authority even if you do not choose to have load coverage. Freight standard insurance is $750,000 to $5,000,000 depending on the commodities transported and $300,000 for non-hazardous freight moved in vehicles under a 10,001 lb weight. Cargo standard insurance is $5,000 per vehicle, $10, 000 per occurrence. Domestic loads: $0.50 per lb per $100 minimum if the load value exceeds $100. International freight: $20 per kg of actual load value if under $20 per kg. International sea freight: $500 per load unit. The load unit may be FCL (full container load which is 1 unit), or LCL (less than container load where the shipping units are an actual count on the bill of laden). In case of partial loss/damage of the load, a claim can be made only for the damage/loss portion, subject to the settlement amount of $0.50 per lb. Load Insurance and Freight Charges – CIF value (cost, insurance and freight). This coverage ensures replacement of the load and the freight shipping cost if the load is damaged or there is total loss of the load. This insurance is necessary with load damage or loss if the repair/replacement cannot be done at the load destination. Freight charges may be prorated and recovered based on the lost/damaged portion of the load but freight charges are nonrefundable if there is damage and the repair occurs at the load destination. Load Insurance Only – Commercial invoice value = value of the load. Request this coverage to ensure the replacement value of your load in case of partial or total loss/damage. Damage Control – Any occurrence regarding damage or full loss of the load must be noted on the bills of laden. All parties involved with the shipment should be informed and your insurance must be current in order to properly file a claim. Adequate Coverage – If a load is underinsured, a claim can only be settled for the percentage of coverage of the load. The load must be insured according to its proper value.