Your Carrier Has $100K in Cargo Coverage. Their Bill of Lading Caps the Claim at $920.

A $284,000 problem that started with a clean file

A broker in St. Louis tendered a load of consumer electronics to MC-2947318 / DOT-4183926. Twenty-four cartons, 1,840 pounds, shipper-declared value of $284,000. The carrier checked out: active authority, Satisfactory safety rating, clean SAFER snapshot, $100,000 cargo policy on the ACORD 25. Standard pre-tender process. Load moved.

The freight disappeared out of a cross-dock facility in Memphis. Cargo claim filed. The carrier's insurer reviewed the Bill of Lading and paid $920.

That's $0.50 per pound times 1,840 pounds.

The carrier's BOL incorporated their published tariff by reference. That tariff set a released liability rate of $0.50/lb for electronics. The shipper signed the BOL at pickup without declaring excess value. Under the Carmack Amendment — 49 U.S.C. § 14706 — the carrier had legally limited their liability to that amount. The $100,000 cargo policy was irrelevant to the claim. The policy wasn't the cap. The BOL was.

Ten days later, the shipper's attorney called the broker.

Not the carrier. The broker.

What Carmack actually says

The Carmack Amendment is the federal statute that governs motor carrier liability for cargo loss and damage. It predates FMCSA by decades, preempts state cargo-loss law in most cases, and establishes a baseline rule: a carrier that receives freight for transportation is liable for actual loss or damage, full stop. Theft is not an excepted cause. Neither is negligent handling. The baseline liability under Carmack is essentially strict.

But Carmack also allows carriers to limit that liability. 49 U.S.C. § 14706(c)(1) provides that a carrier may set rates under which liability is limited to a value established by agreement with the shipper, "if the shipper is afforded a fair opportunity to choose between two or more levels of liability."

That's the released value provision. In practice: the carrier's tariff states a default released rate. Option A is that default rate. Option B is excess declared value — the shipper tells the carrier what the freight is actually worth, pays additional freight charges, and the carrier's liability rises to match. Most shippers never choose Option B. Many shippers have no idea it exists. Some brokers don't know it exists either.

The number that doesn't make the news

$0.50 per pound is the standard LTL released liability rate in most carriers' published tariffs. On a 36,000-lb truckload, that caps Carmack liability at $18,000. On a 1,840-lb electronics shipment, it's $920. On a 30,000-lb flatbed load of industrial equipment valued at $600,000, it's $15,000.

TL carriers often use higher per-lb rates or minimum per-shipment liability floors. Specialized carriers sometimes negotiate different limits by account. But if you don't ask, you're getting whatever the standard tariff says. And the standard tariff tends to assume cargo is worth less than it is.

The carrier's cargo insurance policy might cover $100,000. It might cover $250,000. What matters is what the BOL says — because the BOL is what establishes the carrier's legal exposure. If the released rate is $0.50/lb, the carrier's insurer can argue there's nothing above $0.50/lb to indemnify. The insurer doesn't pay above the legal liability unless the policy specifically provides excess declared value coverage, which most standard cargo policies don't.

What FMCSA actually requires — and doesn't

Here's where most brokers have a gap in their mental model. FMCSA's minimum financial responsibility requirements under 49 CFR § 387.303 are about bodily injury and property damage to third parties. The $750,000 BIPD minimum for non-hazmat general freight is third-party liability insurance — it pays if the carrier's truck kills someone or destroys another vehicle. It has nothing to do with the freight on board.

Cargo insurance for general property carriers is not federally mandated. Household goods carriers have a cargo insurance floor under 49 CFR § 387.301 — $5,000 per vehicle and $10,000 per occurrence — but that's a special carve-out for HHG moves and the numbers are minimal anyway. For the dry van carrier hauling your $400,000 load of electronics, FMCSA requires exactly $0 in cargo coverage.

The $100,000 cargo policy you saw on the ACORD 25 exists because the carrier bought it, or because a customer required it in a carrier agreement, or because it came bundled with their package policy. Not because anyone made them. And its nominal limit may be far higher than what the carrier's BOL actually lets a claimant recover.

What the ACORD 25 doesn't tell you

The ACORD 25 shows the carrier's named insurer, policy number, coverage type, and limit. It does not show the carrier's standard released liability rate. It does not show commodity exclusions baked into the cargo policy. It doesn't tell you whether electronics are sub-limited to $25,000 even when the face of the policy says $100K. It doesn't say whether "theft of unattended vehicle" is excluded — which it sometimes is, meaning the insurer walks away from a claim where the driver made a bathroom stop.

There are two separate numbers that matter on every high-value load:

First: the carrier's Carmack liability, which is determined by the BOL released value. This is what they legally owe.

Second: the carrier's cargo insurance limit, which is what the insurer will pay toward any claim that does arise.

Both have to be adequate for the freight. Most brokers verify the second number and ignore the first.

The common policy traps nobody mentions

Beyond the released value problem, cargo policies have endorsements that kill claims in ways most brokers never read. Three that come up often:

Unattended vehicle exclusions. Some policies exclude claims when the driver was not with the vehicle at the time of loss. One stop at a Pilot, one parked trailer, and the insurer denies the theft claim. If you're tendering cargo that's worth stealing — electronics, pharmaceuticals, liquor, tobacco — ask specifically whether this exclusion exists.

Mysterious disappearance exclusions. If there's no evidence of how the cargo went missing — no forced entry, no witness, no police report attributing cause — some policies treat it as "mysterious disappearance" and exclude it. This applies more often than you'd expect on cross-dock cargo where the loss is discovered at delivery but the point of loss is unknown.

Commodity sub-limits. A $100,000 cargo policy may have a $25,000 per-occurrence sub-limit on electronics, a $10,000 sub-limit on pharmaceuticals, and full limits on consumer staples. The ACORD 25 won't show you the sub-limits. You have to ask.

The broker's position after Montgomery

Before Montgomery v. Caribe Transport II, LLC — the Supreme Court's unanimous May 2026 decision holding that the FAAAA does not preempt state-law negligent-selection claims against freight brokers — the preemption defense gave brokers a layer of insulation. You might not be liable for the shipper's cargo loss even if your vetting was minimal.

That defense is gone. Brokers can now be sued in state court for negligently selecting a carrier. That liability story can include what you knew or should have known about the carrier's cargo coverage and BOL limitations.

If you tendered a $280,000 load without knowing whether the carrier's BOL would cap liability at $0.50/lb, plaintiff's counsel can build a story around that gap. Were you negligent in selecting a carrier whose cargo liability was inadequate for the freight value? Did you disclose the limitation to the shipper? Did you verify that the cargo was actually covered?

These aren't rhetorical questions anymore.

What to ask before you tender a high-value load

Two questions I now put on every load where freight value exceeds $50,000:

"What is your standard released liability rate?" For LTL, this should be in the carrier's published tariff. For TL, it's often in their carrier agreement schedule. If they don't know, ask them to check before you tender. Write the answer down.

"Does your cargo policy include commodity exclusions or per-shipment sublimits that apply to what I'm tendering?" Get a specific answer. If the answer is "I'm not sure," that's a red flag worth resolving before the load moves.

Then, to the shipper: "Do you want to declare excess value on the BOL?" If the freight is worth more than the carrier's released rate would cover at the weight you're moving, the shipper has two options. They can declare excess value on the BOL — which triggers higher freight charges but raises the carrier's Carmack liability — or they can purchase their own all-risk shipper's interest insurance to cover the gap. That's their decision to make. Your job is to surface the question before the load moves, not after it's lost.

How I document this

For any load where freight value exceeds $50,000, my file includes:

• The insurance pull (L&I or ACORD 25), with the date and time it was verified
• A note confirming the carrier's stated released liability rate and the source (tariff reference, carrier agreement, T-call response)
• Any commodity exclusions confirmed by the carrier, with the name of who confirmed them
• Written confirmation that the shipper was notified of the released rate limitation and their response — whether they declared excess value, bought their own coverage, or accepted the risk
• If the shipper declared excess value, a copy of the BOL showing the declared amount

This sounds like a lot for a routine load. It takes about five minutes if you've built the questions into your T-call script. It takes years to rebuild your reputation after a shipper gets $920 on a $284,000 loss and their attorney starts calling everyone in the chain.

The ACORD 25 is a starting point. The released value is what matters when the claim gets filed. Most brokers never ask about it.

— Mason Lavallet

Founder, DOTScreener.com