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Don't even get me started on "Fen-church" policies.
Cargo theft- pick up arranged by Preet Transport Carrier,
- Thread starter ANDYK
- Start date
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Hey, they are beyond any humor at this time. I have spoken with multiple insurance carriers and even they don't understand how this program is being run under them.
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Thanks a lot for all the feedback guys. I really appreciate it. We are in a spot now, customer is holding the broker responsible and we have no one to hold responsible for this now. No response from Preet Transport carrier till now. I don't know if as a broker if we file a claim with Frenchurch as Preet transport insurance was in force till one month after the pick up was done by Preet transport, will they process the claim or not on a cancelled insurance, especially when they know that Preet transport has closed down its operations. Legally is it worth to sue Preet Transport when it has filed bankruptcy.
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What is your insurance provider saying about this? I assume you have reported it to them as a potential claim.
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I had heard about this and I tried to reach out last week to Jas at H & JB transport, but no response for phone calls or email. But phone numbers are active and I left voice message as well.
curious did you pay preet for the move? You stated this was back from September 2023. How did you guys process the payment without the POD? and you mention BVD so I'm assuming they were factoring, which would mean BVD would have had the POD to submit the invoice to you. We are now in the end of March 2024 the timeline doesn't add up. What are we missing here?
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I thought that insurance companies offer insurance only if you are asset based broker, we are not asset based.
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As a 3PL we could not get the same type cargo policy as a carrier but we have a contingent cargo policy and it covers any gaps in the carrier's insurance.
Adding screenshot of insurance
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Not at all. As a freight broker you should have a contingency cargo insurance policy, an errors and omissions policy and a robust general liability policy. Operating in today’s business environment without proper insurance coverage is like walking through a mine field. You should speak to an insurance professional or the company that holds your surety bond.
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No
No We did not pay Preet transport yet. The last communication by email from Preet transport dispatcher Poonam that the truck broke down before going to border, so they are towing it to mechanic. Then after a few days when we were tracing, that the truck is still with mechanic. There after no email response or replies. When we called over their land line after a couple days, Poonam picked up the phone & said the delivery is done and will send POD when she gets it from the driver. So we told our customer it is delivered & we sent an invoice to our customer and told them we do not have POD, please check with the consignee if they received the delivery , only then you can pay us. After couple weeks we got paid, so we closed the file and our accounts guy was waiting for Preet invoice with POD but no response from them. After that business as usual, we did couple more loads to the same shipper and receiver, but using other carriers. All went fine. Now after 6 months, which is a few days ago, my customer called and said the consignee has paid their later invoices but is holding one of their older invoice from Sept 2023, as they need POD, please send POD. Then we started calling Preet transport and found they are closed down and you know rest of the story.
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So this type of policy will they cover the value of the cargo theft by a carrier?
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It would depend on the particular circumstances of the case. Simply speaking, contingency cargo insurance will cover your customers loss in the event that the carriers cargo policy has lapsed. There are a multitude of other provisions that come into play as well. The benefit that we have found is having our insurer “go to bat” for us when we run into these sticky situations. It is not cheap, but it can be immensely helpful.
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In theory yes but I have not had to use it.
If you are going to continue to provide freight brokerage services I would suggest you always get an insurance certificate directly from the insurance broker for every carrier with your company as a named certificate holder so you are informed by the insurance broker of any change in the carrier's insurance.
Can you do a corporate registry search to find out when or if Preet Transport was sold and the name of the shareholders?
Who told you Preet Transport filled for bankruptcy?
If you are going to continue to provide freight brokerage services I would suggest you always get an insurance certificate directly from the insurance broker for every carrier with your company as a named certificate holder so you are informed by the insurance broker of any change in the carrier's insurance.
Can you do a corporate registry search to find out when or if Preet Transport was sold and the name of the shareholders?
Who told you Preet Transport filled for bankruptcy?
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No one told me if Preet transport filed bankruptcy, but BVD capital did say Preet transport have closed down. And we did not get any response from phone calls or emails, as we were frantically trying to get a hold of someone in Preet transport, So I assumed they would have closed down & filed bankruptcy, I am sorry.
We do take certificate of insurance from any carrier we use for the first time. We were dealing with Preet transport for around 2 years before this happened. I don't know if it is practical to ask for certificate of insurance on every order we do with the carriers whom we are using repeatedly with no consequence.
If you suggest it is better to have a broker takes a contingency policy, how much it cost per year and if it covers incidence like this. Normally the carriers insurance is responsible for anything that goes wrong with a load. I am just thinking loud. sorry.
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You are correct, the carriers insurance is suppose to respond to freight claims and other losses, like theft. However there are carriers who neglect to pay their insurance premiums, which results in cancellation of the policy. If you are a certificate holder, the insurance company is obligated to notify you of any change in the carrier’s policy. Once you have a certificate of insurance, it will remain valid until the policy expires or it gets cancelled so you only need to request it once. A comprehensive brokers insurance policy, including contingency cargo, Errors and Omissions and robust general liability coverage can cost upwards of $10k per year. More if your gross receipts are higher. Talk to a professional insurance broker and get a quote based on your specific requirements.
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You need to ensure the carrier has valid insurance (see loaders explanation) and you are notified of any changes in the insurance from the insurance provider, not the carrier.
Plus you need to have a contingent cargo policy in case something goes very wrong.
If you dont verify the carrier's coverage and do not have a contingent cargo policy then it means you are SELF INSURING and you should bank all the money you saved in yearly premiums to pay out a claim if it happens.
In this case you are self insured and now responsible for $62,000 USD
You need to get a lawyer as your responses indicate you are not able to handle this on your own
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On what basis do you think, Frenchurch can deny this claim, as we have all the required paperwork to proove that this load was picked up by a carrier who had a valid insurance at the time of pick up and failed to deliver to consignee in California and is now absconding.
Also can you suggest a lawyer who can handle this kind of case.
this paints a better picture, and I'm sure retelling it, you can tell where mistakes were made. If there is any take away from this whole situation is to make sure you follow up on Invoices in both AR and AP chances are this could'ev been caught and dealt with a lot sooner and be on the "winning" side so speak of Preet closing down. In any case this would be theft, and a police complaint and a lawyer would be the next step. It's never closed just because you'ev been paid, I'ev had shippers call me on a load delivered a year ago and say the receiver is claiming OS&D on the product in transit. Even if it was tempting to let the Invoice slide, the POD should have been hounded and requested after 2 weeks. Even if the driver didn't hand in the physical copy a picture would have saved you a whole lot of this mess.
on the fact that their policy was cancelled in July 2023:
Doubt they'll entertain anything after their coverage has expired.