A pallet of equipment worth $18,000 arrives crushed. The shipper files a claim, confident the carrier will make it right. Weeks later the carrier pays $600 and considers the matter closed. Nothing went wrong with the claim. The freight was simply covered at the carrier's released value of $0.50 per pound, and nobody had bought insurance.
That scenario plays out every day because most shippers assume "the carrier is liable" means "the carrier will pay what it is worth." It does not. This guide explains how carrier liability really works under U.S. law and international conventions, when freight insurance is worth buying, and how to file a claim that gets paid in full.
Carrier Liability Is Not Insurance
Two different things protect your freight, and they are often confused:
| Carrier Liability | Freight (Cargo) Insurance | |
|---|---|---|
| What it is | The carrier's legal duty to pay for loss or damage it caused while the goods were in its care | A separate policy you (or your broker) buy that pays the declared value of the goods |
| Who pays | The carrier, from its own cargo policy or pocket | An insurance underwriter |
| How much | Capped by tariff or contract, often by weight (released value) | Up to the insured value, usually invoice plus freight |
| Fault required? | Yes, and the carrier has legal defenses (acts of God, shipper packaging, inherent vice, public authority, act of public enemy) | Generally no; all-risk policies pay regardless of fault, subject to exclusions |
| Cost to you | Included in the freight rate | Typically a fraction of a percent to about 1–2% of declared value |
| Claims timeline | Months; carrier may deny or offer a partial settlement | Typically faster; insurer pays you, then pursues the carrier |
Domestic Trucking: The Carmack Amendment and Released Value
Interstate truck and rail freight in the United States is governed by the Carmack Amendment (49 U.S.C. § 14706). In principle Carmack is shipper-friendly: the carrier is liable for the actual loss or damage to goods in its possession, and the shipper does not have to prove negligence, only that the freight was tendered in good condition and delivered short or damaged.
The catch is the exception. Carmack allows carriers to limit their liability to a value agreed in writing, usually through the bill of lading and the carrier's published tariff or rules. This is the released rate or released value, and it is where shippers get surprised:
- LTL carriers commonly limit liability by freight class and weight, with figures that range from as little as $0.10 per pound for low-value or used goods up to $25 per pound or more for high-class freight, with per-shipment maximums. A 1,200-lb pallet at $0.50 per pound is $600 of coverage, no matter what was on it.
- Truckload carriers usually carry $100,000 in cargo coverage per truck, which sounds ample until you load $250,000 of electronics or the carrier's policy excludes your commodity (electronics, alcohol, tobacco, pharmaceuticals, and copper are common exclusions).
- Used, refurbished, or unpackaged goods are frequently covered at the lowest tiers or excluded altogether.
You can usually buy up to a higher declared value on the bill of lading for an additional charge, but a declared value is still a liability cap, not insurance. The carrier still gets its legal defenses and still controls the claim.
Shipping something you cannot afford to lose? Tell us the value and we will quote the freight with the right liability coverage or all-risk cargo insurance built in, so a damaged pallet is an inconvenience rather than a loss.
Get a Free Freight Quote →International Freight: Even Lower Caps
If domestic limits are low, international ones can be startling. Ocean carriage to and from the United States falls under the Carriage of Goods by Sea Act (COGSA), which caps carrier liability at $500 per package or customary freight unit. A "package" can be a single pallet or even a container, depending on how the bill of lading is written. Notice of loss or damage is due within three days of delivery.
International air cargo is governed by the Montreal Convention, which limits airline liability to a set number of Special Drawing Rights per kilogram (currently in the low-to-mid 20s of SDRs, roughly $30 per kilogram). Damage claims must be filed within 14 days of receipt and delay claims within 21 days. Cross-border trucking to Canada and Mexico adds another layer, with each country's rules applying on its own soil.
For nearly all international shipments, all-risk marine cargo insurance is the only realistic protection. It is inexpensive relative to the cargo, pays on invoice value plus freight, and covers general average contributions, a shared-loss rule unique to ocean shipping that can leave uninsured cargo owners paying for a vessel casualty they had nothing to do with. See our international freight guide for how insurance fits into Incoterms and landed cost.
When Freight Insurance Is Worth It
Buy cargo insurance when any of the following is true:
- The value exceeds the carrier's limit. Divide your invoice value by the shipment weight. If the result is above the released value per pound, you are self-insuring the difference.
- The commodity is commonly excluded. Electronics, pharmaceuticals, alcohol, artwork, and high-theft goods often sit outside carrier cargo policies.
- The goods are used, refurbished, or lightly packaged. Carriers cover these at the lowest tiers, if at all.
- The shipment moves by ocean or air. Convention limits almost never approach real value.
- You cannot absorb a total loss. For a small business, one uninsured truckload can be the difference between a bad quarter and a closed door.
Shipper's interest insurance is available per shipment through most brokers and forwarders, or as an annual open policy for regular shippers. Premiums for domestic truck freight are commonly a small fraction of a percent of value with a modest minimum per shipment, which makes a $20,000 shipment insurable for well under $200. Ask for coverage when you quote. Our shipper services include arranging it.
How to File a Freight Claim That Gets Paid
Whether you are claiming against the carrier or your insurer, the first hour after delivery decides most of the outcome.
At delivery
- Inspect before you sign. Count pieces and look for crushed corners, torn wrap, water stains, shifted loads, and broken seals.
- Write everything on the delivery receipt. "Subject to inspection" is weak. "2 cartons crushed, pallet wrap torn, visible dent on unit 3" is a claim-winner. A clean signed delivery receipt is the single most common reason claims are denied.
- Photograph everything, including the packaging, labels, and the inside of the trailer if you can.
- Do not refuse the whole shipment unless it is genuinely unusable. Refused freight racks up storage and return charges that complicate the claim.
Concealed damage
Damage discovered after delivery is the hardest to recover because the carrier will argue it happened after the driver left. Report it in writing within five business days (sooner is better), keep all packaging, and request a carrier inspection. The burden of proof shifts heavily to you, which is another argument for all-risk insurance.
The formal claim
File a written claim with the carrier (or through your broker) containing:
- A copy of the bill of lading and the signed delivery receipt with your notations
- The commercial invoice proving the value of the goods
- The freight invoice (you can usually claim the freight charges on damaged goods too)
- Photos, inspection reports, and a repair or replacement estimate
- A specific dollar demand. Claims for "an amount to be determined" are routinely rejected.
Carmack guarantees you at least nine months from delivery to file (two years to sue after a written denial), and carriers must acknowledge a claim within 30 days and resolve it within 120 days or explain the delay. Mitigate your loss where you can by salvaging or repairing, and keep the damaged goods until the carrier has inspected or waived inspection.
Where a Freight Broker Fits In
A broker is not the carrier and does not carry the carrier's liability, so ask any broker two questions: does it verify carriers' cargo insurance before every load, and does it carry contingent cargo insurance that steps in if the carrier's policy fails? MyExpressFreight does both. We also handle the claim for you, from the first phone call through the settlement, because chasing a carrier's claims department is not how a business owner should spend December.
Most important, we tell you before pickup what your freight is covered for and what it would cost to cover it properly. Whether you ship LTL, full truckload, ocean, or air, nationwide or worldwide, that conversation costs nothing and has saved our customers from the $600 check more than once.
Frequently Asked Questions
Is carrier liability the same as freight insurance?
No. Carrier liability is the carrier's legal obligation to pay for damage it caused, capped by tariff or contract and often set by weight. Freight insurance is a separate policy that pays the declared value of the goods, usually regardless of fault.
How long do I have to file a freight claim?
For U.S. interstate truck and rail freight, at least nine months from delivery to file and at least two years to sue after a denial. Concealed damage should be reported within five business days. Ocean claims need notice within three days of delivery; air claims within 14 days for damage and 21 for delay.
How much does freight insurance cost?
Usually a fraction of one percent to about 1–2% of declared value, with a minimum premium per shipment. Commodity, mode, lane, and packaging set the rate. A $20,000 domestic shipment is often insurable for well under $200.
What should I do if my freight arrives damaged?
Inspect before signing, note every defect on the delivery receipt, photograph everything, keep the goods and packaging, notify the carrier or your broker in writing immediately, and file a formal claim with the BOL, delivery receipt, invoice, photos, and a specific dollar demand.
The Bottom Line
Carrier liability is a legal minimum, not a promise to make you whole. Know the released value on every shipment, buy all-risk insurance when the math says you should, inspect and document at delivery, and file claims promptly with complete paperwork. Those habits turn a damaged pallet from a crisis into a line item.
MyExpressFreight vets carrier insurance on every load, offers cargo insurance on any shipment, and manages claims from start to finish for shippers across all 50 states and 150+ countries. Ask us what your next shipment is really covered for.