Carrier Liability vs Cargo Insurance: Understanding the Key Differences

How to Navigate Insurance Quotes and Choose the Best One

When it comes to transporting goods from one place to another, there are two main options: carrier liability and cargo insurance. Both can protect against losses due to damage or theft of your shipment, but they differ in terms of their coverage and how much protection they offer. Understanding the seven key differences between carrier liability and cargo insurance will help you make an informed decision about which option is right for your needs.

  1. Scope of Coverage: Carrier liability covers only the transportation process, while cargo insurance also covers the goods in transit and any related services such as door-to-door delivery.
  2. Cost: Cargo insurance typically costs more than carrier liability due to its broader scope of coverage. However, cargo insurance is often more cost-effective in the long run because of its comprehensive protection.
  3. Responsibility: Carrier liability assumes that the carrier is responsible for any loss or damage to the goods, while cargo insurance shifts some or all of this responsibility to the insurer. For the most comprehensive protection, cargo insurance is the better choice.
  4. Claim Process: With carrier liability, you must file a claim with the carrier who will then determine if and how much they are liable for. With cargo insurance, you must file a claim with the insurer who can then provide coverage up to the policy limit. With cargo insurance, you will also need to provide proof of loss.
  5. Maximum Coverage: Carrier liability typically has a lower maximum coverage than cargo insurance, meaning that any losses over the maximum may not be covered. When transporting valuable goods, cargo insurance is typically the better choice.
  6. Claim Timeframes: Depending on the type of cargo insurance, you may have more time to file a claim than with carrier liability. If the claim is for a partial loss, cargo insurance may also provide more time to file than carrier liability.
  7. Type of Losses Covered: Cargo insurance often covers losses caused by non-accident related events such as natural disasters or extreme weather, while carrier liability typically does not. The type of losses covered will vary depending on the policy, so be sure to check with your insurer before purchasing a cargo insurance policy.

Ultimately, understanding the differences between carrier liability and cargo insurance will help you choose the right option for your needs. Having a good understanding of these differences will also ensure that you get the best possible protection and coverage for your shipment.