Carrier denying claim

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youngtea

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Apr 23, 2015
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Had a shipment that was delivered with damages to two skids. The driver was notified and refused to sign the BOL. Receiver recorded a video of the driver refusing to sign and they took multiple photos. BOL states the damage. I have advised the carrier and their insurance. Carrier says the damage was done at the pick up or receiver, but it isn't their fault. I've looked into it and they are wrong. The shipment shifted in transit and that is how the freight was damaged. I've talked to their insurance and they state their damage is less than their deductible so that can't proceed with a claim. Claim amount is $1500 cad.

Has anyone dealt with a situation like this? How do I resolve this when the carrier refuses to resolve a claim and insurance refuses because it less than their deductible.
 
Unfortunately, you'll have a tough road ahead of you. A shipment that shifted in transit could be caused by two things: the freight was not packaged properly to stand the rigors of shipping or the transit experienced a situation that was outside of the expected norms of shipping. If it didn't stand the rigors of shipping there was not enough shrink wrap, the carton boxes had too low crush weights, the freight was not stacked properly, different sized boxes on top of each other, skids that couldn't handle the expected weights etc. If it was packed properly then you have to identify what would be out of the norm of shipping. Was there an accident, was the freight cross docked improperly, was there willful damage?

The insurance company has an obligation to give you a claim number and a decision on the freight. It may take a while, but it is their obligation. If the amount is below the deductible the insurance company should make arrangements for proof of payment from the carrier or to choose to pay it and collect from the carrier. You need this process completed so that your client can dispose of the freight and not have it sitting on their dock forever while it progresses. If you are not getting anywhere with the insurance company getting a claim number, then ask them for a letter on letterhead that they will not provide the claim at this time and state the reasons. All this information you will need if you choose to take this to a legal level. This claim is $1500. The likelihood of this going to legal is very small and the carrier is banking on it.

From the very little details provided I can almost guarantee that they will claim that it was not properly packed and shifted under normal transportation. Your customers choice will be if they want to get a lawyer involved to proceed with legal action to recover their damages in SCC. It is a large burden to prove because the carrier will never tell you if their driver drove through the median or a similar accident. This is something your lawyer will have to investigate and have proof. You then have to get technical proof, the carton crush values, skid data, amount of shrink wrap etc, and that all aspects of the shipment met or exceeded the requirements for shipping.

Good luck.
 
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A thought...

Perhaps getting your insurance involved... get an inspector out there before they dig in and start using this stuff.

How much is your customer claiming for?

As Jim mentioned... you have a tough road ahead... I think you might have to make a business decision to payout your customer and either try to claim on the carrier insurance, your insurance or small claims maybe.
 
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This will likely be hard to pin on the carrier unless it was obvious negligence I'd imagine. Back 2 skids fell over and it was not strapped properly? Or a leaky roof causing water damage? Pretty obvious. 2 random skids in amongst the load, likely can't hold the carrier liable, or at least will get a strong argument from them as to why not.
 
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JACKBURTON said:
This will likely be hard to pin on the carrier unless it was obvious negligence I'd imagine. Back 2 skids fell over and it was not strapped properly? Or a leaky roof causing water damage? Pretty obvious. 2 random skids in amongst the load, likely can't hold the carrier liable, or at least will get a strong argument from them as to why not.
Click to expand...
100%

I'm saying... get someone over there to get eyes on this stuff before they claim 100% loss on two skids and turn around and use 99.5% of the product.

I've seen shippers try to claim for a damaged box where the contents is fine.
 
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Jim L said:
Unfortunately, you'll have a tough road ahead of you. A shipment that shifted in transit could be caused by two things: the freight was not packaged properly to stand the rigors of shipping or the transit experienced a situation that was outside of the expected norms of shipping. If it didn't stand the rigors of shipping there was not enough shrink wrap, the carton boxes had too low crush weights, the freight was not stacked properly, different sized boxes on top of each other, skids that couldn't handle the expected weights etc. If it was packed properly then you have to identify what would be out of the norm of shipping. Was there an accident, was the freight cross docked improperly, was there willful damage?

The insurance company has an obligation to give you a claim number and a decision on the freight. It may take a while, but it is their obligation. If the amount is below the deductible the insurance company should make arrangements for proof of payment from the carrier or to choose to pay it and collect from the carrier. You need this process completed so that your client can dispose of the freight and not have it sitting on their dock forever while it progresses. If you are not getting anywhere with the insurance company getting a claim number, then ask them for a letter on letterhead that they will not provide the claim at this time and state the reasons. All this information you will need if you choose to take this to a legal level. This claim is $1500. The likelihood of this going to legal is very small and the carrier is banking on it.

From the very little details provided I can almost guarantee that they will claim that it was not properly packed and shifted under normal transportation. Your customers choice will be if they want to get a lawyer involved to proceed with legal action to recover their damages in SCC. It is a large burden to prove because the carrier will never tell you if their driver drove through the median or a similar accident. This is something your lawyer will have to investigate and have proof. You then have to get technical proof, the carton crush values, skid data, amount of shrink wrap etc, and that all aspects of the shipment met or exceeded the requirements for shipping.

Good luck.
Click to expand...
Thank you. I have requested a letter from insurance company about why they are rejecting the claim.
 
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The carrier has thrown this hot potato back to you, in the hope that you’ll cave and forget about it. Keep in mind that the carrier is the one who has to prove that the damage was NOT the result of his negligence. The burden of proof rests with them, not you. In other words, it remains a valid, legitimate claim unless the carrier can prove their actions or lack of actions did not cause the damage. If you get nowhere with either the carrier or their insurer, short pay the freight invoice by the amount of the claim. Now you have thrown that same hot potato back to them. If they want to proceed with legal action, so be it. In any event, a conversation with an experience transportation paralegal, such as ScamChaser on this site, would be a very worthwhile first step.
 
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That is correct. It is also why a freight bill does NOT have to be paid before a claim investigation can be initiated,
 
Brimich Logistics has a good write up on this (linked below):

www.thebrimichgroup.com

Receiving Damaged Freight - 9 Steps To Filing Freight Claims

Materials you need to run your business just arrived in unacceptable condition, how are you going to deal with the problem of receiving damaged freight?
www.thebrimichgroup.com www.thebrimichgroup.com

and they do mention that Freight charges should be paid before going about claiming any damages. I assume because the freight charges are separate to the claim and by not paying for the transport of the goods it can void any claims. Again just assuming. For instance if this was just 2 skids and freight charges were $500 bucks or well below the claim amount of $1500.00 the carrier might just cut their losses and not accept the freight charges, to legally not be held liable.

Again all assumption here^
 
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Melroy75 said:
Brimich Logistics has a good write up on this (linked below):

www.thebrimichgroup.com

Receiving Damaged Freight - 9 Steps To Filing Freight Claims

Materials you need to run your business just arrived in unacceptable condition, how are you going to deal with the problem of receiving damaged freight?
www.thebrimichgroup.com www.thebrimichgroup.com

and they do mention that Freight charges should be paid before going about claiming any damages. I assume because the freight charges are separate to the claim and by not paying for the transport of the goods it can void any claims. Again just assuming. For instance if this was just 2 skids and freight charges were $500 bucks or well below the claim amount of $1500.00 the carrier might just cut their losses and not accept the freight charges, to legally not be held liable.

Again all assumption here^
Click to expand...
Paying the freight bill and starting a claim investigation are not related. Upon notification of a claim and receipt of all information from the shipper, the carrier is obligated to begin an investigation. It is their responsibility to prove they were not responsible and if they are found to be so, they can deny the claim. As you so correctly noted, quite often the freight charges, either the original or the freight bill to replace damaged goods, becomes a part of the settlement. If the carrier is found to be liable for the damages, they are not required to payout the claim until the freight charges are paid.
 
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How much are the freight charges?

For small claim amounts like this hiring a lawyer would be counterproductive: most will want some kind of retainer, and your legal expenses will very quickly exceed the amount of the claim itself. Do you want to spend $5K to collect 1.5K? Probably not..

I've dealt with similar situations.. First and foremost I would make the customer whole by reimbursing them for the damage. Don't argue with them.. respect that your valued customer has suffered a loss, and do what you can to fix the issue. If you vacillate here you will upset them over $1500.00, and you could possibly lose the account. Assure them that you have their back by promptly taking responsibility. Worst case, then, is you pay the claim out of pocket. Once the customer has been assured and is no longer part of the settlement equation you may decide to negotiate a fair settlement with your carrier.. perhaps you have a good reputation with them.. showing that you're willing to share in the loss, perhaps by going 50/50 on the claim establishes that you're attempting to be fair. Again, worst case you pay the whole shot.. $1500.00 isn't the end of the world.. I've paid claims and still maintain that that was the best possible way to go..i.e. still have the customer and the carrier.
 
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I would also agree with the majority here, best option given the amount of claim would be to bite the bullet and pay your customer out. As for dealing with carrier, depends on your relationship, if there's that much pushback then it would seem this might just be one of those carriers off the link and it's up to you whether a freight bill deduction would be necessary or not.
 
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