The carrier is not insuring your freight. It is limiting what it owes you.
Shippers assume that handing goods to a carrier transfers the risk. It does not. Standard carriage conditions cap what a carrier owes by the weight of the shipment, not by what the goods are worth, unless a value was declared before it moved. A heavy pallet of cheap parts and a light pallet of electronics are treated the same way.
Build the cargo file The short answerWeight, not value, unless you declared a value first
Insurance. It is a limit on someone else’s liability to you
Whether those conditions apply at all can turn on the paperwork
If a carrier loses my shipment, do they pay what it was worth?
Usually not. Under standard conditions of carriage a carrier’s liability is limited by the weight of the goods rather than their value, unless a higher value was declared before shipping and the carrier charged for accepting that risk. For high-value, low-weight freight the gap between the cap and the actual loss can be very large.
British Columbia adds a wrinkle that catches people who ship into and out of other provinces. Legal commentary on how motor-truck liability differs across Canada notes that in BC the standard Uniform Conditions are not deemed to apply as a matter of law, and that whether they form part of the contract can depend on the bill of lading being signed by the shipper when the goods are loaded – rather than handed over at the other end. Source: DWF Canada, liability issues in motor truck transport claims. We are brokers, not lawyers – what we take from it is operational: the paperwork at pickup matters, and it is worth getting right every time.
A recovery based on weight, against a loss based on value, on goods you had already been paid for or already promised to a customer.
Carrier liability is not cargo insurance.
Carrier liability
What the trucking company owes you if it is at fault, capped by the conditions of carriage. You have to prove fault, you argue with their insurer, and the cap applies regardless of what the goods were worth.
Cargo insurance
Your own policy on your own goods. It responds to the loss rather than to the argument about fault, it is written to the value of the shipment, and the recovery against the carrier becomes your insurer’s problem rather than yours.
Three habits that change the outcome.
Declare the value, and expect to pay for it
Declaring a higher value asks the carrier to accept more risk, and they will normally charge for it. That charge is the honest price of the cover. Not declaring is not free – it just moves the cost to you and you find out later.
Get the bill of lading right at pickup
Signed by the shipper, when the goods are loaded, with the value and the goods described properly. It is the document that says what was agreed and when. Sorting it out at the delivery end is too late to be worth much.
Insure the goods, not the argument
Cargo cover responds to the loss. Chasing a carrier means proving fault, waiting on their insurer and living with the cap. One of those pays you this month.
What shippers ask us about this.
The carrier says they are fully insured. Is that enough?
Their insurance covers their liability, which is the capped amount, not the value of your goods. Two different questions. A carrier can be properly insured and still owe you a fraction of what you lost.
We ship through a freight forwarder. Are we covered by them?
Usually not. A forwarder arranging transport is not the same as a forwarder insuring your goods, and their own liability terms are typically limited too. If cover was not specifically arranged for your shipment, assume it does not exist and check.
Does our commercial property policy cover goods in transit?
Generally not. Property policies cover goods at described locations. Transit is its own exposure and needs its own cover, which is one of the most common gaps we find on manufacturing and wholesale files.
What about goods sitting in a third-party warehouse?
Different again. A warehouse holds goods as bailee, with its own limited terms, and storage sits outside the moving legs. A stock throughput approach can put the whole journey – supplier, transit, storage, delivery – on one policy rather than three that do not quite meet.
We only ship a few times a year. Is it worth it?
That depends on what one shipment is worth to the business rather than on how many there are. A single container that does not arrive can be a bad year. Tell us what moves and how often and we will tell you honestly whether it is worth arranging.
Not the question you had? Build the cargo file and set out your own situation in plain words. A licensed broker reads it and replies in writing.
Send us the bill of lading and the Incoterm line.
We will tell you where the risk actually sits on your journey, which legs are covered and which are not, and what it would take to put the whole trip on one policy. Next business day, and usually the same day.