Issue link: https://read.dmtmag.com/i/147844
Feature Story By By Robert Mucci Understanding Valuation vs. Insurance is Key to Movers, Warehouseman and Their Customers T he difference between valuation and insurance is complicated enough for many insurance people to have difficulty wrapping their head around. So is it any wonder that movers are often at a loss to try and explain the differences to potential customers? Particularly when Judges frequently use the terms interchangeably. This confusion stems from the minimal differences between the liability of an insurer and the liability of a common carrier. So the first step is to delve into a bit of well-needed clarification. Liability of Common Carriers Whether at the federal level or the laws of most states, unless the loss or damage is caused by one of five exceptions, the trucking company is liable for the shipper's loss. The five exceptions are: (1) Act of God (2) Public enemy [war] (3) Public authority [confiscation, destruction, etc.] (4) Act or default of shipper or owner (5) Inherent vice/latent defect. So as long as the shipper can prove the goods were all just fine when they were loaded, the carrier can only escape responsibility if the loss or damage of the transported goods resulted from one of the above five so-called "absolute defenses." Limitation(s) of Carrier Economic Liability Essentially, there is little or no correlation between the service provided and the value of the item, meaning the liability is basically the same whether you're transporting a single chair or an entire living room set. So, if the loss is not result from one of the exceptions to liability, the carrier is responsible, but only required to pay the loss up to the value declared, provided the shipper was given the right to increase the economic liability of the carrier by paying an increased charge. However, there is no requirement that the shipper be given the right to declare "full value," merely given the right to declare increased value/valuation. / Owner operator/August 2013 / / 34 OO 0813 edit.indd 34 7/8/13 11:52 AM