Trucking attorney Jim Mahoney's law practice encompasses trucking and cargo loss litigation, claims management, compliance management, and operations consulting.
When Are Freight Brokers Liable in Cargo Claims?
Freight brokers and carriers often find themselves in a game of hot potato when determining who will shoulder the cost of lost or damaged cargo. Here’s what’s important to know when navigating the complexities of freight broker liability in cargo claims.
- Essex Insurance Co. v. Barrett Moving & Storage, Inc.: The Court concluded that Barrett “acted as a motor carrier, not a broker” and was liable for damages.
- Mecca & Sons Trucking Corp. v. White Arrow LLC: “White Arrow [carrier] is liable to Mecca [broker] under the Carmack Amendment for the losses incurred by the rejected cheese.”
- Tryg Insurance v. CH Robinson Worldwide Inc.: “CRWH was ruled to be a carrier rather than a broker and therefore liable for the damages caused to the miniature chocolate liqueur bottles.”
- Realize that the Carmack Amendment isn’t foolproof protection. You can be liable under various state law causes of action, such as negligence, breach of contract, etc.
- Be cautious of how you market and perform your services. Advertising as an “all in one” transportation solution may bring in more customers but can aid legal arguments that your company “held itself out as a carrier” and is therefore subject to the Carmack Amendment.
- Address cargo liability in your terms and conditions of service, such as including language that disclaims liability altogether or accepts liability in instances of proven malfeasance but then caps that liability.
- Invest in all-risk insurance to protect your business against claims for loss or damage. You can customize the coverage to suit your specific needs.