Basics of a Cargo Loading Survey for Insurance Underwriting

What purpose does a Cargo Loading Survey have?

A cargo survey is performed before an insurance policy on the freight or cargo in question is made active.  For this and all other posts, we’ll refer to cargo as goods that are bulk or break-bulk and freight as goods that are on pallets or where multiple sections can fit in a 53′ caravan.  This review of the cargo and survey of loading is often requested on very expensive equipment that is considered to be an oversize load or “super load”.  Conversely, a daily truckload of cheese  from the factory or distribution to grocery store is simply loaded and transported frequently enough that the freight is without question and valued as cheese on a daily freight policy.  The survey is done for several reasons outlined below.

The survey ensures that the cargo or freight :

Flight Sim section 1 in mid air move to freight bed

Flight Sim section 1 in mid air move to freight bed

  • is real, durable, in good condition without damages
  • lays within the description that the purchasing party and underwriters have described it as and agreed to
  • is being transported by people who are competent, able, qualified, and in a sound mind to move the equipment.

Cargo or freight insurance policies are typically issued in the fashion of an inland marine policy where coverage might apply from the moment the goods leave the door of the warehouse or holding facility, to the time they are set on the ground after being taken off the truck; they can be modified as seen fit by Underwriters.

Review of Documentation:

NASA Worker probably reviewing some insurance information before shuttle launch

NASA Worker probably reviewing some insurance information before shuttle launch

The surveyor or adjuster’s should also:

  • record and verify all of the  parties involved in moving the cargo, and their contact information.
  • takes copies of and verifies all State Department of Transportation road permits
  • review and copy all bills of lading, purchase orders and invoices
  • occasionally verify the driving records of truck driver, if requested.
  • cross checks dates and verifythem against other documents

Securing the Cargo load:

Cargo or freight underwriting surveys can be pretty hectic.  Often times the crews will be tired or overworked and things are usually destined to go wrong in one way or another.  Sometimes the wrong truck or crane shows up or there’s a tear in a sling – maybe a crew worker just gets frustrated and could care less about the rest of the team.  All of the above mentioned things are really important, but they are technicalities and can be dealt with later – expect for the permit, which is very important.  Aside from those listed above, the single most important factor is to make sure the load is secured property and to document it.  If the truck gets into an accident and / or looses the load, you can bet money that the trucker and his company are going to point their finger at you, likely no matter what the evidence is or how many police officers saw it differently.  Even if they don’t, the cargo insurance company you’re working for might. Cargo load outs are a big risk for errors and ommisions or liability insurance of the surveyor.

Truck chains used to secure cargo for flight sim load 1

Truck chains used to secure cargo for flight sim load 1

For this reason it’s absolutely necessary to document the condition of the unit before hand, in addition to the condition of all load securing devices and the load itself, once secured. One cannot stress this enough!!!

When all the cargo is lifted and set on the trucks for transport, the surveyor should:

  • inspect all chains, tensioners / binders to ensure they are in sound condition prior to use, taking photos and any serial numbers and / or manufacturer’s information available.  Also, ask the trucker how old the chains are and when he lasted used them.  Either he’ll lie about it or tell you the truth but at least you’ll have something for counsel to question him on should it go to court.
  • review all the securing points / loop eyes on the load to check for any cracks that could break during transport
  • allow the trucker and load out crew to secure the load, then carefully review it for any error
  • Do not hesitate to ask for something to be changed if it doesn’t make sense
  • once the load is secure, allow the crew to cover and tarp the cargo then make sure it is secure with tie downs and / or bungee cords.
  • document the major tie down areas with photos and notes for your report, in addition to all of the above mentioned factors in securing the load

Forming a report:

Pen and Paper notepad for insurance claim documenations

Take good notes for your survey report!

Your report should include all of the basics mentioned above, in addition to any particular details you noticed or documented – particularly those that were done without your consent.  For example, if the moving crew potentially damaged something by bumping it into another object or if the trucker failed to secure the tarp and / or load to your requirements.  Remember: If the load gets damaged a lot of folks are going to look at your report and point a finger at it so document everything with photos as well.  No doubt you’ll be testifying in subrogation proceedings if something goes wrong – that’s what you’re being hired for.  There’s no such thing as gathering too much information and it’s always better to have too much than too little. Pay attention to detail and never hesitate to let everyone know the insurance policy could be void if they go against what you recommend.

Common Sense goes a long way in this business and it always pays to be objective when a preponderance of doubt arises.  After all, all a group of attorneys need is a preponderance of evidence to begin a negligence case against your errors and omissions insurance.  Oh…and on the advice of any good insurance services agent, never, ever admit coverage for anything, unless you have the authority to sign a check.

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