“Cargo Liability Insurance”
Transporting cargo from one side of the country to another or anywhere in-between is a dangerous proposition, and that’s where cargo liability insurance comes in. There are organized crime rings that actually hijack trailers and steal goods on board as a way to make quick money, so the contents of a trailer need insurance to cover it. Cargo liability insurance is a big topic with a lot of gray areas in the legal world.
What Is Cargo Liability Insurance?
Cargo liability insurance is a policy that an owner/driver obtains alone or a trucking company enters into with the shipper that ensures that goods will get from one place to another safely and in mint condition. This is primarily a policy that covers the trucker, whether he has a bill of lading or a contract, and determines his liability if harm comes to the contents of the truck. All of the liability is on him since he’s responsible for the goods until they’re delivered. A common carrier will haul for anyone who hires it; a contract carrier has an exclusive contract with one shipper. Some trucks do both. They are two separate insurance policies that deal with these different sets of circumstances.
Common Carrier Liability
Common carrier liability is the most basic type of cargo liability insurance an owner/driver can have. In this policy, the truck driver is liable for the goods while they are in his possession. If there’s damage or loss, the truck owner/driver must assume responsibility. There are some limitations to the contract, such as acts of God or the shipper didn’t package the product well, for example. This is just a simple liability and is good for basic transportation of goods.
Contract Carrier Liability
Contract carrier liability is for a company that’s interested in more detailed cargo liability insurance. In this type of insurance, the driver and the company write an actual contract about the shipment, including what the driver is liable for. The driver is then responsible for the product in more ways than with the simple, common carrier liability. This can increase the driver’s culpability, but it also gives the company more of a guarantee that its product will make it to the end point safely.
Who Needs Cargo Liability Insurance?
Any owner/driver needs some type of cargo liability insurance, and most shippers should know whether their drivers carry any. If a company wants more liability and more guarantees, it should look into contract carrier liability, which also means he has the owner/driver’s exclusive services. There’s too much that can happen to cargo on the road to leave it up to chance. From being robbed to getting into an accident, there are just too many variables to be without some sort of cargo insurance.
