Premier has the right kinds of insurance with the right providers and in the right amounts. This is an extremely important topic and one that is often not as well understood as it should be. As a traffic manager, you need to be most concerned with cargo insurance, the policy which will repair or replace your product should it be damaged in transit. One unpaid claim can cost you a lot more than you save by using underinsured carriers or brokers. This section will touch upon various insurance issues, starting with cargo insurance. And be sure to check out the terms and frequently asked questions below for more information.
Premier carries one million dollars of “all-risk” coverage with an “A” rated carrier. Let’s break this down.
We carry one million dollars of coverage on every load with a $5,000.00 deductible. If there is damage to your shipment amounting to less than $5,000, Premier will investigate and (where appropriate) settle the claim ourselves. If there is a claim over $5,000, then the insurance company will investigate and (where appropriate) settle the claim. If the product can be repaired it must be repaired. If it cannot be repaired, it will be replaced for up to $1,000,000.00.
Most shipments do not approach one million in value. Certainly most individual machines don’t. So why not pay for less insurance – wouldn’t $400,000 do the trick? Sometimes it would, but it’s also pretty easy to put 3 machines worth $200,000.00 each on one load, so a half million might not be enough. By setting the limit at a full million we know we’re covered – or more importantly you are.
Did You Know?
The length of time to stop an eighteen wheeler is 40% greater than that of an automobile. Depending on the weight of their load, whether they are bobtailing, road conditions, and other factors. To be sure, it takes a much greater time to stop than an automobile. Trucks only have 10 brakes NOT eighteen. Recently manufactured trucks are now required to have anti-lock brakes.
You should beware of carriers who only have a couple hundred thousand dollars of cargo insurance. They are obviously not experts in machinery shipments. Even though you might only be putting one machine on such a carrier, you don’t know what they might load in addition. If that load is involved in a major accident you might not be covered. An insurance company can avoid full payment of a claim if they discover the whole load was underinsured. You should also beware of carriers that limit their coverage to a rate per pound. These kind of policies work great (and cost less) if you’re a carrier that moves a lot of bulldozers, but it won’t pay for the value of a machine tool. Also watch for those which will only cover the full value if it is written (declared) on the bill of lading.
Premier carries what is called an “all-risk” policy. It is the opposite of what is called a “limited peril” policy. A limited peril policy may only cover certain kinds of losses. It may for example limit claims to those involving the truck completely over-turning. There are a lot of things that could damage your cargo without the truck turning over. There are actually some uncovered events even with an “all-risk” policy but they are extremely remote events such as “an act of war”, or “a nuclear explosion.”
Premier’s insurance is with a U.S. based insurance carrier with an “A” rating or higher. All insurance companies are rated according to industry standards. An “A” rated or higher carrier (you can have double A, etc) is the most financially sound as so is the most able to pay their claims. You should beware of carriers with insurance companies rated lower than a “B” and also beware of insurance companies based outside the United States.
Good insurance is expensive, but it’s part of doing the job right.
There are several additional types of insurance policies that we carry. They are:
General Liability – This is for general and miscellaneous claims.
Auto Liability – This is for property damage or injury caused by our trucks.
Warehouse Legal Liability – Basically this is cargo insurance for when the product is warehoused.
Physical Damage Insurance – This covers our tractors and trailer.
Worker’s Compensation – This covers job related injuries to our employees.
Q) What do I do if I need to file a claim?
A) You should contact us immediately, as soon as you hear there’s a possible problem. Try to give us an idea of the nature of the damage and whether or not you expect the repair to cost more or less than $5,000.00. Take pictures and forward them to us right away. If you feel Premier is responsible, send us a note stating so on your letter head to our address available on this web site.
Q) What happens after I file a claim?
A) The claim will be investigated. First we will check to see if the damage was noted at the point of origin and therefore was not caused in transit. We will also look at the photos to see if there is an obvious cause of the damage. We will see if there is any indication that the cargo was not properly packaged or prepared for shipping. If there are indications that the damage was caused in transit then we will proceed with processing the claim. If it appears the claim will or may exceed $5,000.00 (deductible) we will notify our insurance carrier who will assign an adjuster. They may require inspections of the cargo, interviews, and support documentation. Unless there are substantial indications that the carrier is not at fault, a repair cost will be determined and paid.
Q) What if the damage isn’t noticed right away?
A) The receiving party is responsible to check over the cargo at the time of delivery and write on the bill of lading if there are any damages or shortages. If the receiving party fails to do this it may weaken their position if the claim is disputed. When the receiving party signs for receipt of the cargo and does not note exceptions, we call this a “clean” bill of lading. You can still file a claim, but you will have to be able to show conclusively that the damage or shortage did not occur after delivery to the consignee.
Q) What if the damage wasn’t visible to the consignee at the time of delivery because the cargo was crated or wrapped?
A) This is called “concealed damage”, and the same procedures apply. You can still file a claim. If it can be determined that the damage occurred in transit the claim may be processed for payment. If there is some question as to when the damage occurred, or if the cause appears to be improper packaging or preparation, the claim may be denied.
Q) Do brokers carry cargo insurance?
A) Brokers are not required to carry cargo insurance. To maintain a broker’s license, they only need a $50,000 bond. They (and you) are relying on the insurance of the “actual carrier” they choose for you. Some brokers are careful to make sure your shipment goes on a sufficiently insured carrier, but many are not. If you use a broker, you should find out what kind of risk you are taking.
Q) Does Premier broker freight?
A) Yes, many carriers have both kinds of operating licenses (authority). At Premier we cover even brokered loads with our cargo insurance. We do this by reporting all of our freight revenue (including broker loads) to our insurance carrier, we pay a percentage fee on that revenue for our coverage. We are also careful to work with properly insured carriers and keep their certificates on file. In the event there is a claim involving a “brokered” truck, we will try to have their insurance process the claim but should there be any issues of coverage our insurance will step in to make sure you are taken care of. This kind of policy costs us more, but we know if you hire us to move your load you will expect us to solve any problems that might arise. It’s part of doing the job right.