CFB Claims and Risk Management 2 — Questions and Answers
Question 1: Under 49 CFR Part 370, how long does a carrier have to acknowledge receipt of a freight claim after it is filed?
- 15 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
49 CFR § 370.5 requires a carrier to acknowledge receipt of a freight claim in writing within 30 days of receiving it, unless the claim is resolved within that period.
Question 2: Under 49 CFR Part 370, what is the maximum time a carrier has to pay, deny, or make a settlement offer on a freight claim before the claimant can pursue legal action?
- 60 days
- 90 days
- 120 days (Correct answer)
- 180 days
Correct answer: 120 days
49 CFR § 370.9 requires carriers to pay, deny, or offer settlement within 120 days of claim receipt; if more time is needed, they must provide status updates every 60 days thereafter.
Question 3: Under the Carmack Amendment, what is the statute of limitations for a shipper to file a lawsuit against a carrier for a denied freight claim?
- 1 year from delivery date
- 2 years from the date the carrier disallows the claim in writing (Correct answer)
- 3 years from the date of loss
- 5 years from the date the claim was filed
Correct answer: 2 years from the date the carrier disallows the claim in writing
The Carmack Amendment allows carriers to set a minimum two-year limitation period for suits, which begins on the date the carrier gives written notice that it has disallowed (denied) the claim.
Question 4: What is 'concealed damage' in the context of freight claims?
- Damage to the exterior packaging visible to the driver at pickup
- Damage discovered after delivery when the outer packaging appeared intact at the time of receipt (Correct answer)
- Damage the carrier intentionally hid from the consignee
- Pre-existing damage documented before shipment
Correct answer: Damage discovered after delivery when the outer packaging appeared intact at the time of receipt
Concealed damage is internal damage to goods that is not apparent until the packaging is opened, making it more difficult to prove when the damage occurred relative to the carrier's possession.
Question 5: Which party bears primary liability for cargo loss or damage during transportation under the Carmack Amendment?
- The freight broker who arranged the shipment
- The shipper who tendered the goods
- The motor carrier transporting the freight (Correct answer)
- The consignee who accepted delivery
Correct answer: The motor carrier transporting the freight
The Carmack Amendment places strict liability on the motor carrier for goods in its care, custody, and control, unless the carrier can prove one of the five common-law defenses.
Question 6: What does Errors and Omissions (E&O) insurance protect freight brokers from?
- Physical damage to cargo while in transit
- Claims arising from professional mistakes, negligent advice, or failures in brokerage service delivery (Correct answer)
- Bodily injury liability from accidents involving carrier vehicles
- Losses caused by carrier insolvency
Correct answer: Claims arising from professional mistakes, negligent advice, or failures in brokerage service delivery
E&O insurance (also called professional liability insurance) covers freight brokers against claims that their professional errors, omissions, or negligent acts caused financial harm to a client.
Question 7: What is a 'shortage claim' in freight brokerage?
- A claim filed when the carrier invoices more than the contracted rate
- A claim for freight that was delivered but is missing pieces, units, or quantities compared to what was shipped (Correct answer)
- A claim filed when delivery occurs later than promised
- A claim for inadequate packaging materials provided by the carrier
Correct answer: A claim for freight that was delivered but is missing pieces, units, or quantities compared to what was shipped
A shortage claim is filed when the count, weight, or number of pieces received at delivery is less than what was tendered by the shipper, indicating partial loss during transit.
CFB Claims and Risk Management 2
Under 49 CFR Part 370, how long does a carrier have to acknowledge receipt of a freight claim after it is filed?