When to Purchase All-Risk Cargo Insurance

When to purchase cargo insurance

When it comes to who insures shipping cargo, the carrier is the one responsible for that freight while it’s in their possession. That being said, when something goes wrong with a shipment, the carrier is probably less worried than the shipper. When a carrier is out on the road, they might not file claims until they’re back in the office.

Legally, a 3PL/brokerage is not responsible for cargo damage, but a shipper won’t see it that way. Since brokers are the ones managing the transportation of goods, shippers will generally try to hold the broker responsible in some way.

Damaged, lost, or stolen cargo is a frustrating scenario for the shipper, and it’s frustrating for the broker who represents the shipper’s interests.

Cargo Shield: Cargo Insurance for the Shipper’s Interest

In 2016, ITS Financial Services, McGriff, Seibels, & Williams, and Roanoke Underwriting announced a transportation-specific insurance coverage available to brokers. Cargo Shield was created to give more control to 3PLs over the claims process. This new form of cargo insurance empowers brokers to give their customers peace of mind.

Recently, Truckstop officially changed the name to a more inclusive brand name: Truckstop.com Cargo Insurance. For the sake of this article, we’ll continue to use Cargo Shield, but the official brand name is now Truckstop.com Cargo Insurance.

Logistic Dynamics Inc. (LDI) invited Truckstop’s Cargo Shield Expert Blayne Marples to host a webinar on how LDI and Cargo Shield integrate. If you’re a LDI Freight Broker Agent, access that webinar directly on the home page of the Knowledge Base. Log in and start watching!

If you’re not feeling a video right now, or if you aren’t one of LDI’s authorized broker agents, read on.

What is Cargo Shield?

Cargo Shield is an “all-risk” coverage and removes the reliance on the carrier for filing any claims. It puts you in a “first party position” during the claims process, putting you in control rather than the carrier. Having the ability to choose this allows you to provide a white glove insurance solution to your customer at anytime.

Cargo Shield is a simple, cost-effective way to provide “all-risk” cargo insurance for your customer. When a broker chooses to apply Cargo Shield to a load, it applies $100,000 all-risk for full truckloads and $50,000 for LTL.

Their “all-risk” protects against theft, acts of god, driver error, and unattended vehicles. It also covers common motor carrier loopholes. Essentially, it covers everything contingent coverage doesn’t cover.

Why Cargo Shield?

  • Try as we might, we cannot avoid cargo claims.

  • Cargo Shield can be purchased on a per-load basis.

    If Customer A wants it but Customer B doesn’t, that’s fine. You only choose this coverage for the loads that need it.

  • Control the process

    You can eliminate reliance on carriers and control the claims process yourself.

  • Immediate proof of insurance

    By putting Cargo Shield on a load, you have immediate proof of insurance and don’t need to wait on the carrier.

For example, Blayne gave us the scenario of a hot load from a customer that needs to hit the spot market. A broker can’t dispatch the truck until they have insurance in hand with their name on it. Cargo Shield allows brokers to purchase the insurance to take care of it to dispatch the truck to pick up the load.

Our own Agent Development Manager, Joe Adinolfi, recommends that if a broker is moving high claim commodities, Cargo Shield is helpful to have.

What Can I Expect When Filing a Claim?

Claims are processed in 30 days or less by a dedicated team. All members working on the claims team are transportation experts; they work in the logistic field and know what to look for to settle claims quickly for your customer. They may reach out to you with an email or phone call for some more information, leaving you to focus on revenue-generating activities, not chasing down claims. This allows you to provide your customer with faster updates and a check sooner.

When to purchase cargo sheild insurance

The LDI Advantage

LDI already has significant insurance coverage (General liability, Auto liability, Umbrella, Workers Comp, Errors & Omissions, Contingent Cargo, and Contingent Auto Liability) coverage which gives us an advantage against other brokerages. For our agents, the certificate can be found in the Knowledge Base.

However, ours is not the same coverage you can expect carriers to have. The claims process unfortunately takes a long time (which we take care of in the corporate office, so our brokers can carry on with their business).
For LDI freight brokers, Cargo Shield is a flat $24 per shipment. Joe points out that if your customer wants to add on the $24 coverage, the claims process goes much faster. “With Cargo Shield, it’s all taken care of by ITS. They pay out the customer right away. It keeps the customer happy.”

Cargo Shield has been integrated into our TMS coverage on the spot. You have seamless access from your LDI platform, providing a flat-rate cost regardless of transit or acceptable commodity.

There are some exclusions to the kind of cargo covered, such as auto and motorcycles, so cross check your commodity with their exclusion list to verify it’s covered under Cargo Shield. It’s incredibly easy to see them through LDI’s TMS. To see just how easy it is, check out the video on the LDI knowledge Base and Joe will walk you through it in the last couple of minutes.

For more information on cargo claims, best practices, and the kind of trouble you can go through without an “all-risk” cargo insurance like Cargo Shield, check out this video by Transportation Attorney and Consultant Cassandra Gaines of Gaines Law Group (not affiliated with LDI).

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *