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 is the primary purpose of requiring a carrier's Certificate of Insurance (COI) before dispatching a load?
Answer: To confirm the carrier maintains adequate, active insurance coverage before taking on liability for a shipper's freight
A COI provides documented proof that a carrier's cargo and auto liability policies are active and meet required coverage minimums, protecting the broker and shipper from using an uninsured carrier.
Which type of freight claim is filed when goods are never delivered and cannot be located?
Answer: Loss claim
A loss claim is filed when an entire shipment or specific freight items are never delivered, meaning they were lost, stolen, or misdelivered during the carrier's control.
What is the broker's primary role when a cargo claim arises on a shipment they arranged?
Answer: Facilitate communication between the shipper and carrier, and assist in navigating the claim resolution process
Freight brokers are not typically the liable party under the Carmack Amendment, but they play a vital role as intermediaries — helping shippers gather documentation, contacting carriers, and expediting resolution.
In a freight claim settlement, what does 'actual cash value' typically mean?
Answer: The replacement cost of the goods minus reasonable depreciation
Actual cash value represents what it would cost to replace the lost or damaged goods at current market prices, minus any depreciation for age, wear, or obsolescence at the time of loss.
When is the appropriate time for a freight broker to conduct carrier vetting to effectively minimize claims and risk?
Answer: Before dispatching any load to a carrier, as part of the onboarding process
Proactive carrier vetting — verifying authority, insurance, safety ratings, and history — must occur before a carrier is used so that risky carriers are never dispatched in the first place.
Which of the following is a best-practice risk management strategy for freight brokers seeking to reduce cargo claim exposure?
Answer: Maintaining a vetted carrier network with verified authority, insurance, and acceptable safety ratings
A curated carrier network with ongoing credential verification ensures brokers only dispatch loads to carriers who are legally authorized, properly insured, and have demonstrated safe operating histories.
Which federal regulation specifically governs the processing of loss and damage claims by motor carriers and freight forwarders?
Answer: 49 CFR Part 370 (Principles and Practices for Investigation and Voluntary Disposition of Loss and Damage Claims)
49 CFR Part 370 establishes the standardized procedures and timelines that motor carriers and freight forwarders must follow when receiving, acknowledging, investigating, and resolving freight claims.