So you’ve finally found a solid freight carrier to ship your trade show booth from New York City to arrive in time for the show in Las Vegas. But what happens if your pricey set up is damaged during shipment? Have you covered all of your bases? Here’s everything you need to know before buying freight shipping insurance.
Freight insurance provides additional coverage above and beyond the carrier’s default protection policy, which they are legally required to have. Typically, a carrier’s standard policy covers your shipment for a flat rate, and doesn’t adjust based on your freight’s value. Depending on the carrier, you could be looking at a flat amount or a number that adjusts on a dollar to pound ratio.
Unfortunately, freight damage is a relatively common occurrence. It can happen due to any of the following reasons:
- Subpar packing
- Inadequate ventilation
- Poor distribution of cargo weight
- Wrongly declared cargo
- Heavy containers stored on light ones
- Motor vehicle accidents
- Natural disaster
If your item is worth more than the standard coverage amount, it is worth adding an independent policy to ensure that you’re covered in the event that an accident occurs. At the very least, knowing that your trade show booth is safe and covered will provide good peace of mind for both you and your boss.
Here are a few things to consider before taking out an additional insurance policy.
1. What does Freight Insurance Cover?
As we mentioned earlier, every freight shipment comes with limited liability coverage. This is either a flat rate policy or an amount that adjusts based on the weight of the item that you’re shipping. It does not necessarily reflect the actual value of the item that’s being shipped.
If your item is damaged during shipping, to file a liability claim, the carrier must be at fault for the damaged or lost item. If your item was damaged as a result of subpar packing, loading errors, or weather-related issues, the carrier is not at fault and therefore the included policy will not cover damages. Additionally, if damage isn’t reported upon receipt of the delivery, a claim cannot be filed later on. These are just a few reasons why it is a good idea to purchase additional insurance, often referred to as cargo insurance, when shipping a valuable item.
That being said, it is also important to note that not all items are insurable. Some independent policies, for example, do not offer coverage for fresh foods, laptop and tablet computers, jewelry and precious stones, cell phones, boats, yachts or household goods. When searching for your policy, be sure to verify that your item is eligible for coverage.
2. Understanding your Freight Coverage Options
When you purchase your own cargo insurance plan, you will need to decide upon limits and deductibles. The verbiage and definition will vary from policy to policy, but generally, the limit refers to the maximum amount that the insurance provider will pay if your item is damaged.
The deductible refers to the maximum amount that you’ll have to pay out of pocket if your item is damaged and you have to file a claim. Increasing your deductible can help to lower the price of your insurance; however, be mindful of what you’re actually saving versus how much you’ll have to come out of pocket in the event of a claim. For example, check the premium for $500 versus a $1,000 deductible. If you’re only saving $5 on premium to go for the $1,000 deductible, it’s not worth the savings. Explore all of your options before making a decision.
3. Check (and Double Check) your Packaging
The easiest (and most cost-effective) insurance policy is following best practices for freight packing. Cardboard, packing peanuts and bubble wrap are your friends. Invite them to your packing party.
For extra fragile shipments, consider wrapping your item in paper and surrounding it with bubble wrap and/or packing peanuts in its box. Then wrap that box in bubble wrap and box it again. Not only can good packing help protect your item, it can also prevent against theft. If you’re shipping something valuable, you don’t necessarily want to ship it in an identifying box. Extra packaging can cover up the item’s details or brand identification, making it less attractive to thieves.
The extra protection will go a long way. You can’t control what happens to your item during shipping, but you can do everything possible to protect it on the front end.
4. Make sure you have Effectively Communicated Everything
The more information that you provide the insurance company with, the more accurately the policy underwriter is able to quote your policy. It is imperative that you document and communicate the value of the item being shipped when getting your quote.
Also be sure to communicate any temperature needs or special handling requirements. The more information you can provide, the better. When you book with Freight Center, our agents are extremely knowledgeable and can help you avoid several issues. We help guide you through the process every step of the way.
5. Track your Shipment en Route
Once your shipment is en route, track it along its journey. When you ship with FreightCenter, your agent will provide you with updates as your package travels along its journey.
If something goes wrong during shipping and you end up having to file a claim, having date and time stamps along the way will be helpful information. You can also request copies of all pick-up orders and delivery notes along the way. Handlers document who transferred your package and its condition, making it easier to identify who is at fault if damage occurs.