Intermodal Claim & Insurance Information Outlined Blog Feature
Rick LaGore

By: Rick LaGore on February 14th, 2017

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Intermodal Claim & Insurance Information Outlined



Intermodal risk & insurance

During the vetting process of on boarding a new IMC intermodal provider, shippers typically skip by what is probably the most important aspect of their selection ... cargo insurance coverage.  The result is cargo insurance comes a part of a conversation when it is needed, which is not exactly the best of times.  

The goal of this paint drying blog is to help shed some light on cargo claims and insurance, as it relates to intermodal shipping.  Enough information to ask the appropriate questions. 


  • Basice on Intermodal Claims & InsuranceThe Basics on Rail Carrier Coverage:
    • Minimum Filing Requirements = $250.00
    • Maximum Liability for Cargo = $250,000.00 (or $100,000.00 for consumer electronics where the Seal Agreement terms and conditions are not met)
    • Freight Liability = $10,000.00
    • Taxes or Customs Duties on Alcohol = $250.00 
  • Contingent Cargo and Shipper’s Interest Policies
    • Contingent Cargo Policy – This policy would likely have similar exclusions to the rail carrier, however, the policy should pay any additional value of loss, exceeding rail carrier’s maximum liability, if the loss or damage was a covered occurrence (rail carrier accepted liability).
    • Shipper’s Interest Policy – These policies are superior to Contingent Cargo Policies because the coverage is more comprehensive with fewer exclusions (based on individual policies and underwriter approval).
      • Unlike a contingent cargo policy, a shipper’s interest policy covers the actual cargo rather than the carrier’s liability.


  • Intermodal ClaimsClaims that are Covered by Rail Carriers vs. Claims Not Covered:
    • Claims Covered
        • Claims will be covered if loss or damage claim that happened while in transit, provided that one of the five defenses listed as “Bill of Lading Exceptions” (listed below) were not the prominent cause of the loss
          • Proper Standard Transportation Commodity Code (STCC) designation was used
          • Container was sealed
          • Association of American Railroad (AAR) approved blocking and bracing methods can be proven
          • The rail will be covered for the repair cost
        • In the event the commodity cannot be restored to its previous condition, the invoiced value at the point of origin (wholesale) will be the value determined for the claim.
          • Shipment deemed a total loss, but maintains scrap or salvage value
            • A salvage credit must be deducted from the total value claimed.
          • Limitation of value as imposed by other contracted parties will be incorporated and the lowest maximum claim amount shall apply 
    • Claims Not Covered:
      • Most claims that are denied are due to a Bill of Lading Exception. Under this defense the rail carrier must also prove they were free from any negligence. However, in the event that it is determined that both the shipper and the rail carrier could have had some level of negligence; the rail carrier may choose to settle for a percentage of the total value of loss or damage claimed. These defenses are listed below, along with some specific examples:
        • Act of God
        • Inherent Vice
        • Public Authority
        • Public Enemy
        • Act or Default of the Shipper 
          • Includes improper packaging or blocking & bracing
        • *** Claims for shipments in and out of Mexico ***

intermodal denied coverage

As with most any cargo claim, claim expenses such as: consequential damages; values in excess of maximum liability; punitive damages; loss of profit; interest or attorney’s fees; and fines for overweight shipments on intermodal containers is not covered 


It is Important to Know and Understand the Differences Between Prohibited Commodities & Restricted Commodities

A prohibited article is any substance that cannot be loaded onto a container under any circumstance.  There are some prohibited commodities that will or will not be considered prohibited based on the owner of the container.

Restricted commodities are acceptable to be loaded on a intermodal container, although with caveats and limits.

The list of both prohibited and restricted can be confusing, so we recommend working closely with a reputable IMC to ensure your company's commodities are appropriate for intermodal transport.

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About Rick LaGore

Rick is the co-founder and CEO of InTek Freight & Logistics, a company focused on being the place where companies come when faced with a logistics problem.

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