October 18, 2017 | Cargo Insurance, Industry Insights

Cargo Insurance in Action: Covering Freight Damage On the Road

Share This:
Featured Image

Cargo owners often think that transporting goods by water as more perilous than shipping freight by land. Ocean travel covers thousands of miles over several weeks versus land distances, which are typically measured in hundreds of miles and days. The assumption, therefore, is that the road comes with fewer hazards due to the shorter transits. But making this assumption can be costly for those that don’t properly insure cargo – whether by water or land.

When Cargo Insurance is Used

Look at a recent insurance claim that involved a 900-mile journey from Rhode Island to a buyer’s warehouse outside Chicago in which a shipment of solar panel kits arrived damaged. The cartons containing the solar panel kits were visibly damaged upon receipt. The buyer notified the shipper of the damage, who in turn immediately notified their insurance company. The insurer appointed an independent third-party surveyor who confirmed during the inspection that four of the five cartons had visible signs of damage, clearly indicating that the merchandise was handled roughly during transit. The surveyor also confirmed that the cargo could neither be repaired nor sold as salvage due to the significant level of damage and sensitive nature of the goods.  

The insured shipper fortunately in this case was properly covered with Cargo insurance, and recovered the value of the damaged cargo less the policy’s deductible. The reported loss amount was $32,250.00, the value of the cargo, less the insured’s deductible of $2,500.00, for a total claim paid of $29,750. Without Cargo insurance in place to respond to the claim, the burden of proof would have been the shipper’s responsibility to try and prove that the loss was the result of carrier negligence.

It’s important to note that carriers typically use contractual agreements to limit their liability for loss to cargo. The contractual limits of liability can usually be found in the Bill of Lading. Even if the shipper were able to prove that the carrier was negligent for the loss, the recovery could have been limited to .50 per pound, which would be significantly less than the value of the cargo.

Does Your Business Need Cargo Insurance?

Cargo insurance provides shippers with coverage to protect their goods from loss, damage, or theft while in transit. Generally, goods are insured while being warehoused or stored and while in transit, until they reach the buyer. Goods may be insured on a spot-shipment basis or under an Open Cargo policy. Coverage on a spot-shipment basis offers coverage for a single, individual shipment whereas an Open Cargo policy is good for clients who insure shipments on a regular basis.

About Roanoke Trade

Roanoke Trade has the experience and expertise to customize a Cargo insurance policy to respond to a shipper’s client’s needs. For a review of your Cargo insurance program to determine if it properly addresses your risk profile, please contact one of our professionals at 1-800-ROANOKE (800-762-6653).

Share This:

Related


Roanoke Appoints a New Regional Vice President and Head of Sales

Roanoke has appointed two key leaders to new roles, effective November 1, 2023. Please join us in congratulating Patrice Lafayette for accepting the position of Regional Vice President, Western Region, and Grant Goldsmith, who has accepted a position as Head of Sales. Patrice has been a steadfast leader of Roanoke’s Western Region for more than 17 years. She started her career as a Bond Account Manager and has held several roles during her tenure, including Bond Manager and Director of Sales for the Long Beach Sales team, and most recently, has been responsible for managing relationships with many of our […]

Industry Insights

Hurricane Insurance Readiness Guide for Logistics Professionals

Minimize disruption. Maximize recovery. Insure what matters. Why Insurance Readiness Is Business Resilience Every hurricane season, logistics businesses across the Gulf and East Coasts — and increasingly, inland — face serious risks. From warehouse flooding and power loss to damaged cargo and business shutdowns, the financial fallout can be significant. The good news? Insurance isn’t just a recovery tool — it’s a strategic advantage. This guide will help you evaluate your current policies, identify critical gaps, and understand what protections are most important before the next storm strikes. Designed for: Freight forwarders Customs brokers Warehouse and yard operators Inland and […]

Cargo Insurance

How to Select a Reliable Trucking Partner: A Guide for 3PLs to Combat Industry Fraud

By Trent Van Wormer, Strategic Relationship Manager The transportation industry operates on trust, efficiency, and strong partnerships. For third-party logistics providers (3PLs), choosing a reliable trucking partner is not only critical for operational success but also essential in combating fraud—a persistent threat in the logistics industry. According to the Transportation Intermediaries Association (TIA), fraud-related issues, including double brokering and carrier identity theft, cost the industry millions annually. By conducting thorough due diligence, 3PLs can mitigate risks and build long-term, trustworthy relationships with great trucking partners. Here are the key factors to consider. Operational Capabilities and Capacity Assessing a trucking company’s […]

Cargo Insurance

Roanoke is the leading provider of insurance and surety solutions for transportation and logistics providers. In fact, we are recognized as the most reliable source for U.S. customs bonds.

Contact

If you have any questions or need help, feel free to contact with our team.

800-762-6653
US Flag

US CORPORATE HEADQUARTERS

1501 E. Woodfield Road

Suite 400W

Schaumburg, IL 60173


Canada Flag

CANADA CORPORATE HEADQUARTERS

390 Bay Street

Munich Re Centre, 22nd Floor

Toronto, ON M5H 2Y2

Solutions that Go the Distance.

© 2024 Roanoke Insurance Group Inc.

Better Business Bureau logoCoverholder at Lloyd's logo