How to Handle a Notice of Claim

What Is a Notice of Claim?

A notice of claim is a formal written communication from a shipper, consignee, broker, or third party asserting that your motor carrier is liable for loss, damage, delay, overcharge, or injury arising from your transportation services. Receiving a notice of claim is a normal part of operating a trucking business, but how you respond can significantly impact your financial exposure, insurance costs, and business reputation. Prompt, professional handling is essential.

Types of Claims Motor Carriers Face

The most common claims filed against motor carriers include:

Cargo Claims

Claims for loss or damage to freight during transportation are governed by the Carmack Amendment (49 USC 14706). Under Carmack, the carrier is held strictly liable for cargo in its possession unless it can prove an exception applies (act of God, act of the public enemy, act of the shipper, public authority, or inherent nature of the goods).

Personal Injury and Property Damage Claims

Third-party claims arising from accidents involving your vehicles. These are typically handled through your public liability insurance and may involve significant dollar amounts.

Delay Claims

Claims for damages resulting from the late delivery of freight. The claimant must typically demonstrate that the carrier was aware of the time-critical nature of the shipment and that the delay caused quantifiable damages.

Step 1: Acknowledge the Claim Promptly

Federal regulations require carriers to acknowledge receipt of a cargo claim within 30 days. Best practice is to acknowledge receipt within 5-10 business days. Your acknowledgment should:

• Confirm receipt of the claim in writing
• Assign a claim reference number
• Identify the person or department handling the claim
• Request any additional documentation needed to evaluate the claim

Step 2: Investigate Thoroughly

Conduct a comprehensive investigation before accepting or denying any claim:

• Review the bill of lading -- Check for noted exceptions, special instructions, or limitations
• Examine delivery receipts -- Were damages noted at delivery? Was the shipment signed for as received in good condition?
• Interview the driver -- Get a written statement about loading, transit, and delivery conditions
• Review photographs -- Document the condition of the freight at pickup and delivery
• Check temperature logs (for refrigerated shipments) -- Verify proper temperature maintenance
• Review GPS and ELD data -- Verify the route, stops, and transit time

Step 3: Evaluate and Respond

After investigation, you must issue a disposition within 120 days of receiving the claim. Your options include:

• Pay the claim in full -- If investigation confirms carrier liability
• Make a settlement offer -- If the claim amount is disputed but liability is accepted
• Deny the claim -- If investigation reveals a valid defense or insufficient documentation
• Request additional information -- If you need more evidence to make a determination

Step 4: Notify Your Insurance Company

Report all claims to your insurance carrier promptly, even if you believe you are not liable. Late reporting can jeopardize your coverage. Your policy likely requires notification within a specific timeframe. For claims involving personal injury or significant property damage, your insurer will typically take over the handling process.

Best Practices for Claim Prevention

• Document everything -- Photograph loads at pickup and delivery, note exceptions on the BOL
• Train drivers on proper cargo securement, load inspection, and documentation procedures
• Maintain thorough records -- Bills of lading, delivery receipts, temperature logs, and GPS data
• Implement standard operating procedures for loading, transit, and delivery

Monitor your carrier's safety and inspection data through TruckCodes carrier search. Explore the knowledge base for more compliance guidance and use the carrier startup checklist to build a comprehensive claims-prevention program.