Claims and Risk Management Flashcards
7 cards from real CFB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Claims and Risk Management flashcards as text
What federal law governs carrier liability for freight loss and damage in interstate commerce?
Answer: Carmack Amendment
The Carmack Amendment (49 U.S.C. § 14706) establishes the liability framework for motor carriers and freight forwarders for loss or damage to goods in interstate commerce.
Under the Carmack Amendment, what is the standard time limit for a shipper to file a written freight claim with a carrier?
Answer: 9 months from delivery or scheduled delivery
The Carmack Amendment allows carriers to set a minimum claim filing window of 9 months from delivery (or scheduled delivery for lost freight), and most carrier tariffs adopt this standard.
What type of insurance protects a freight broker when a carrier's cargo insurance fails to pay a valid claim?
Answer: Contingent cargo insurance
Contingent cargo insurance (also called contingent liability insurance) steps in to cover cargo losses when the responsible motor carrier's insurance is insufficient or denies the claim.
Which document is most critical when filing a freight damage claim to establish that damage occurred during transit?
Answer: Bill of lading with damage notations signed at delivery
A bill of lading with damage exceptions noted and signed by the driver at delivery creates a contemporaneous record proving the damage occurred during the carrier's custody.
What does 'released value' mean when applied to a freight shipment?
Answer: The shipper declares a lower value to obtain a reduced rate, limiting carrier liability to that declared amount
Released value is a declared value lower than the actual commodity value that qualifies the shipper for a reduced freight rate while capping the carrier's maximum liability per pound or per shipment.
What is subrogation in the context of freight claims?
Answer: The right of an insurer, after paying a claim, to step into the insured's shoes and recover from the responsible party
Subrogation allows an insurance company that paid a cargo claim to pursue recovery against the carrier or other negligent party that caused the loss, preventing a double recovery by the insured.
If freight arrives with visible damage, what immediate action should the consignee take to protect their claim rights?
Answer: Note the specific damage on the delivery receipt or POD before signing
Noting exceptions on the proof of delivery before signing is essential because it creates a legal record that damage was present at delivery and occurred during the carrier's care, custody, and control.