Insurance Laws Freight Brokers Should Know in 2017


Nobody in the freight industry wants to talk about Freight Claim Loss. It is considered a taboo topic that no wants to touch. However, all of us equally know that freight insurance, freight claim loss, and freight insurance laws are important, so that, in the minute chance that a freight loss happens to you, you will know if and when you are liable.

The Carmack Amendment

Among the top governing legislation of freight claims laws, the Carmack Amendment stands at the pinnacle. It protects buyers and sellers against undue damage on the part of the carrier. It, as any other insurance law, does not mean that the carrier is always liable for everything. An Act of God, a public enemy, a shipper’s negligence, government-issued policies, and inherent vice of goods can exempt carriers from carrying the responsibility of liability if a freight loss occurs, putting the pressure on shippers to follow the best practices in shipping. Additionally, the mode of transportation dictates additional stipulations.

Yet, it also signifies that carriers have a duty to disprove allegations of negligence, so shippers need to understand their own responsibilities with respect to proper packaging and selection of transit modes.

Carriage of Goods by Sea Act (COGSA)

The COGSA dictates international ocean shipping liability, comparable to the Carmack Amendment. There are stark differences though, between the COGSA and the Carmarc Amendment. For example, an ocean carrier has up to 17 possible defenses, but a given carrier must also show that the carrier is free from any negligence that could have resulted in damage. Under the Carmack Amendment, as explained in Part II of the Carmack Amendment post, buyers have up to nine months to file a claim. The COGSA, on the other hand, only allows the filing of claims up to three days from delivery.


To conclude, the Carmack Amendment governs domestic, on-ground shipments. COGSA and other freight claim laws govern ocean and air transport limits of liability. Therefore, depending on the mode of transport, you as a broker will have different laws to rely on in case of a freight accident. Adding the fact that the C.H Robinson case proved that brokers cannot claim immunity to freight loss if proven guilty of negligence, we as freight brokers should always be vigilant in the whole freight process – from the selection of carriers until the shipment reaches its destination.

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