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The Crucial Role of Extra Insurance in LTL Shipments



LTL Cargo Insurance

In the intricate world of logistics and shipping, ensuring the safe and timely arrival of your cargo is paramount.

While Less-Than-Truckload (LTL) shipping is the preferred method for transporting smaller loads among many shippers due to its cost-efficiency and convenience, it carries inherent risks. That's where extra insurance for your LTL shipment becomes indispensable.


Let’s delve into why shippers might require extra cargo insurance for LTL shipments, the benefits it brings, and its profound significance.


Understanding LTL Shipping

LTL shipping is a cost-effective solution for shippers with smaller loads that don't necessitate an entire truck.

Multiple shippers share space in a single truck, enabling them to reduce transportation costs. While LTL shipping offers practicality, it also exposes shippers to certain risks they must be aware of.


What Is LTL Cargo Insurance?

Cargo insurance exists because, despite meticulous planning, careful packaging, and cautious handling, goods may still arrive damaged.


Simply put, cargo insurance shields shippers from financial loss due to damaged or lost cargo. It reimburses the insured amount in the event of unexpected occurrences like vehicle accidents, natural disasters, cargo abandonment, customs rejections, acts of war, and loss, among others. The most common types of claims shippers file include:

  • Damage - This is when freight is received with visible damage and is of the most common forms of claims.

  • Loss - This type of claim occurs when goods are lost in transit; meaning that the cargo was picked up but never delivered.

  • Concealed - When loss or damage is revealed after delivery and reported to the carrier after the driver already leaves, it's considered concealed.

  • Shortage - When the recipient only receives a portion of the freight expected, a shortage occurs. This often happen when the product falls out or pieces go missing.

  • Refused - Sometimes a shipment is delivered, and the product is damaged, is the incorrect freight, or the shipment is late. If your consignee refuses the shipment, it’s returned to the carrier’s delivery terminal.

The Need for Extra Insurance


Limited Liability: LTL carriers typically offer limited liability coverage, which may not fully compensate for the cargo's value in case of loss or damage. This inadequacy can be particularly concerning for shipments with high-value goods.

Handling Risks: LTL shipping involves multiple handling points, increasing the risk of damage or loss due to mishandling, accidents, or unforeseen circumstances.

Combined Shipments: In an LTL scenario, your cargo shares space with other shipments, meaning damage to neighboring shipments could potentially affect your goods.


The Benefits of LTL Cargo Insurance

Unlike freight insurance, which bases payouts on shipment weight, cargo insurance aims to reimburse the full value of the shipped goods. Shippers benefit from full value reimbursements for lost or damaged goods without restrictive liability limits.

With full value cargo insurance, the shipper's position is in the first-party, eliminating dependency on the carrier's limited liability. This is crucial as more than half of carrier liability claims are often denied.


Comprehensive Coverage: Extra insurance on your LTL shipment provides comprehensive coverage, including protection against theft, damage, accidents, and more.

Valuable Cargo: For shipments containing high-value or irreplaceable items, extra insurance is essential to guarantee receiving the full value of goods in case of loss.

Customized Policies: Insurance providers offer flexibility in tailoring policies to align with cargo value and associated risks.


Mitigating Business Risks


Customer Satisfaction: Extra insurance enhances customer satisfaction by ensuring the safety and security of shipments. Delivering damaged or lost goods can lead to negative customer experiences and harm your reputation.

Financial Protection: Extra insurance safeguards your bottom line by minimizing the financial impact of damaged or lost cargo. It expedites the recovery of your investment.

Compliance and Peace of Mind: Compliance with insurance requirements can be crucial for specific industries or contracts, offering legal protection and peace of mind for your business.

Cargo insurance offers a fundamental advantage by shielding shippers from potential financial setbacks in case their shipment sustains damager goes missing. The upfront premium payment grants a sense of security as merchandise departs from the warehouse.


The Significance of LTL Cargo Insurance

In the context of Less Than Truckload (LTL) shipping, where carriers' liability coverage is typically limited, the significance of this additional safeguard becomes apparent. Shippers can confidently trust that their valuable cargo is comprehensively protected through the added layer of cargo insurance, ensuring peace of mind throughout the transportation process.

Revcon offers full value cargo insurance with coverage based on proof of damage rather than proof of liability. You'll receive door-to-door coverage for the total value of your package or shipment, with guaranteed coverage in the event of damage or loss - no matter where, when, or why it occurs.


With Revcon, you can easily quote and purchase insurance while booking a shipment. You'll receive a policy in your name in which all the terms and conditions of coverage are transparent, instead of dealing with unwanted surprises during claims. On average, claimants receive payments in just 7 – 10 days after receipt of important documents, which translates to happier customers, quicker sales recovery, and minimized disruption to your daily operations.


Watch our video on how easy it is to add LTL cargo insurance to a shipment with Revcon’s TMS.


Contact us to learn more.


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