Transportation Liability: Two Common Myths

Transportation liability in short means who takes responsibility in the event of damage or loss to a cargo shipment during transport. In some cases, the client can be held responsible if the damages are a result of the cargo itself, and in other cases the transporter’s insurance company will cover this.

Here are two common myths about transportation liability that can cost you and your business in the long run.

Transportation Liability: Two Common Myths

Myth: Carrier & Broker Contracts are Standard

Many people assume that carrier and broker contracts are standard in the transportation industry, and they’re surprised when they get a few months into the business and find out that they are not. Carrier and broker contracts are terms negotiated by the supplier and the transportation company. They are not standard by any means. Read your own contract carefully before you add your signature to it.

There can be many potential variations in your contract, and you should pay especially careful attention to the clauses that talk about transportation liability. Sometimes the supplier waives all responsibility to the carrier. Be sure.

Myth: My Insurance Will Cover My Loss

Transportation liability is more complicated than it used to be. We could say that there are many more risks on the road that transportation companies have to deal with to get their cargo from one point to another. These risks have an inevitable impact on liability and insurance.

Don’t assume that your insurance will automatically cover the loss. There are many cases where you could be underinsured for the specific loss (or value of the loss) that you have experienced. In which case your insurance company might only cover this loss partially or not cover it at all.

This puts your business and the trust of your clients at serious risk. Again, read any fine print carefully before putting down your signature, and make sure you ask your insurer what your policies cover.

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