Written By: Rory K. McGinty, P.C.
When it comes to a mover’s liability in a damage claim situation, the customer often states:
“I Want Full Replacement Value For My Damaged Goods”
The Bill of Lading is a contract between the mover and the customer which contains language limiting the mover’s liability in the event all or part of a shipment is lost or damaged. The customer is asked to choose among several levels of liability protection which are available at corresponding rates. The more liability the customer wants the mover to assume, the more the move is going to cost since such liability exposure is a cost of doing business. To put it another way, the more protection a customer wants, the more he is going to have to pay for the move.
Judges are typically unfamiliar with the contractual limitations on a mover=s liability which are found in the typical Bill of Lading, and may view such limitations with skepticism. If a judge believes the customer was not aware of or did not understand the meaning of the language limiting the mover’s liability, he may refuse to enforce it. Moreover, some judges will hold that such language limits a mover’s liability for breach of contract, but not for negligence.
The most obvious way for a mover to protect itself it to insure that the customer has chosen a level of liability protection and signed to affirm his choice. You might be surprised how many Bills of Lading have a signature at the bottom of the page but no signature in the section governing mover’s liability. The uniform Bill of Lading contains a default provision for the mover’s liability in the absence of a signature. However, a customer can argue, in the absence of a signature, that he was not aware there was a limitation on the mover’s liability.
One additional way to avoid such claims, and to defend them when they occur, is to have the customer sign another piece of paper which more clearly explains that:
(a) federal and state law allows a mover to limit its liability for loss and damage claims;
(b) the customer agrees that the liability of the mover is limited as provided on the Bill of Lading regardless of whether the claim is for breach of contract or for negligence;
(c) the customer understands the mover’s rates are based on the level of liability chosen by the customer, and a higher level of protection is available to the customer at higher rates; and
(d) the customer has selected the level of liability protection he is willing to pay for.
Remember: a mover’s ability to limit its liability is determined by federal and state law. A mover cannot impose a limitation on its liability other than as set forth on the Uniform Bill of Lading or set forth in applicable regulations. A mover cannot, for example, require that the customer waive all liability on the part of the mover. In some states such as Illinois, a mover cannot offer replacement value protection to the customer. However, a mover can document that the customer understands those provisions on the Bill of Lading which limits a mover’s liability, has freely chosen the level of liability protection he is willing to pay for, and agrees to be subject to such limitations.