Insurance policies vary from insurer (insurance company) to insurer; some of the coverages listed below will not be found in all policies, or might be available but have to be added to the standard policy.  Available coverages include:

• Damage occurring during loading or unloading
• Damage due to dampness
• Damage caused by fire (not caused by the vice or nature of the goods)
• Damage caused by collision regardless of whether fault belongs to the carrier or a third party
• Damage caused by inappropriate loading by the carrier (as opposed to damage caused by inadequate packing done by the shipper)
• Damage caused by infestation (by insects, for example)
• Damage to reusable packing containers
• Loss due to theft
• Loss due to missing cargo
• Loss of freight charges due to damage to goods (earned freight coverage)

A further explanation of this: if you arrive at the delivery point with the goods, but are not paid, or are only partially paid, for the delivery due to damage to the cargo, earned freight coverage allows you to recover the freight charges from your insurer (instead of the shipper).

• Loss of perishable items if your heating system or refrigeration unit breaks down
• Salvage efforts, including temporary replacement of your vehicle if it breaks down or is damaged in a collision but the goods being carried are not damaged (cargo recovery extra expense coverage)
• Loss of value to undamaged goods due to shipper’s written contract term (coverage for shipper’s control of undamaged goods)

Shipper’s control of undamaged goods might apply, for example, if pursuant to a contract the cargo had to be delivered by a certain date, and you arrived at the point of delivery a day late.  Even if the goods were undamaged, under the contract the shipper might not have to pay you, or would pay you a reduced fee. Coverage for this would allow you recover your full fee from your insurer.

• Pollutant cleanup and removal (most commonly after a collision)
• Debris removal (again most commonly after a collision)
• Cost of defense

Cost of defense is an extremely important item.  If, for example, goods in transit are damaged due to their vice or nature (as above, for example, goods that are susceptible to catching fire within a temperature range that is likely to be encountered during shipping are not packed so as to protect them from this hazard), the shipper is nevertheless likely to file a claim against you.  Your insurer is likely to deny the claim, meaning it will refuse to pay (on your behalf) the shipper for this loss. In turn the shipper might well file a lawsuit against you. With cost of defense coverage, your insurer will pay lawyers, and all associated fees and costs such as court costs, to defend you. Absent this coverage you will be left in the position of having to pay the shipper’s claim yourself, or pay lawyers to defend you, both of which could be expensive.

There are five exceptions that allow a carrier to avoid liability:

• Act of God (such as a tornado)
• Act of War
• Act of shipper (such as inadequately packing goods)
• Act of the government (such as goods being held up at an inspection point for an undue length of time)
• Vice or nature of goods being transported (as above, for example, goods that are susceptible to catching fire within a temperature range that is likely to be encountered during shipping are not packed so as to protect them from this hazard)

Briefly and in plain English, if a shipper delivers cargo to you that is in good condition, and you deliver it after transport in less than good condition (or the goods are lost or stolen), you are liable for the amount of damages proven by the shipper.  To avoid liability you must prove that you were not negligent or that one of the five exceptions applies.

As with all insurance policies, deductions will apply.  Deductions provide that you, the insured, must pay a certain amount of any claim before the insurer begins paying.  A typical policy might have a $1,000 deduction for stolen cargo, meaning that if any cargo was stolen you would pay the first $1,000 of the loss, the insurer would pay the rest, up to the limit of liability.