Your guide to shipper's interest insurance

We all hope nothing goes wrong during the shipping process, but no one can guarantee goods will reach their location unscathed. Road traffic incidents, weather, and theft are all possibilities for cargo in transit. While carrier companies take measures to prevent these issues from impacting your shipment, taking out additional insurance policies for your shipments can give you peace of mind and protect your cargo if the unthinkable happens.

Let’s take a look at how to protect your freight with shipper’s interest insurance.

What is the shipper's interest insurance?

Most carriers will include insurance within their quotes for freight shipping. This is usually called carrier liability coverage and offers limited coverage for your goods, typically based on weight rather than value. Shippers have little control over this type of insurance because it’s simply there to cover the carrier’s liability if anything goes wrong. 

Sometimes, you’ll need to send out freight valued higher than what the carrier’s insurance will cover. In this situation, purchasing your own insurance policy to protect your goods at their correct valuation is a good idea. 

This kind of policy is known as shipper’s interest insurance. It helps ensure shippers receive an insurance payout that matches the full value of goods if anything goes wrong, rather than accepting the carrier’s valuation. 

Shipper's interest vs. carrier liability coverage

Shipper’s interested insurance and carrier liability coverage might seem similar, but they have some big differences. Here are the key characteristics of each type of coverage:

Traditional carrier liability coverage

• This is basic insurance purchased by carriers to cover legal responsibility in transporting goods.
• Coverage is typically limited, often based on weight rather than the cargo’s actual value.
• Policies may not cover the entire value of items, leading to potential shortfalls for shippers.
• It often excludes certain types of damage, such as weather-related incidents, concealed damage, or issues from improper packaging or loading.
• The cost is generally included in the carrier’s quoted shipping price, meaning shippers don’t need to worry about organizing it.
• Claims are processed through the carrier’s insurance, which can be slow and challenging.
• Shippers have limited control over payout timelines and outcomes.

Shipper’s interest insurance

• Optional but comprehensive insurance policy that covers the actual value of the cargo.
• Provided by third-party logistics companies, purchased separately from standard carrier coverage.
• It offers broad protection against nearly all types of damage without needing to establish carrier fault.
• Reduces financial risk by minimizing losses in the event of an incident.
• The claims process is typically faster and more straightforward because the shipper doesn’t need to go through the carrier. This gives shippers more control over outcomes.
• Shippers benefit from quicker, smoother payouts, reducing financial risk and providing peace of mind.

What are the benefits?

Shipper’s interest insurance offers significant benefits compared to carrier liability coverage. These advantages include:

• Full coverage protection: Shipper’s interest insurance will cover the actual value of your goods, rather than carrier liability insurance, which typically values your goods based on weight.
• Affordable rates: While the Shipper’s interest insurance comes with an additional cost, it is typically reasonably priced based on mode of transport, type of freight, and value. This cost is just a fraction of any losses not covered under carrier liability insurance and is well worth it for peace of mind alone.
• Faster claims processing: Because the shipper deals with the insurance company directly, any claims are handled much faster than carrier liability claims. This is great for resolving any claims and receiving payouts quickly.
• Peace of mind: You always have the peace of mind that your goods are protected, even if something happens during transit.

How to decide if you need a shipper’s interest insurance

Should you always get the shipper’s interest insurance? The answer is, “It depends.”

 In some cases, you may be happy with the standard carrier liability coverage included in your shipping quote. That limited coverage may be enough for lower-value shipments or when you’re sticking to a tight shipping budget.

Shipper’s interest insurance is a better solution for shippers looking for full-value coverage and reduced hassle if an incident occurs. 

However, this may not cover every possible eventuality, so it’s important to check the details of any agreement to see if it suits your needs. Working with a third-party logistics expert can help you choose which option is right for you.

Work with DTS for shipper's interest insurance

If you’re looking for shipper’s interest insurance, you want to be certain that you’re getting the best deal and the coverage you need. Working with an experienced partner can help you get the best coverage for your cargo at the right price. 

DTS offers shipper’s interest insurance to help you protect your cargo and your interests. 

Get in touch with us today for a quote!