Concealed Damages

Dealing with concealed damage claims can be one of the most frustrating experiences of any capital project.  Generally speaking they are the most difficult to prove since the carrier bill of lading has been signed off “free and clear” meaning that no exceptions were reported and documented at the time of delivery.  A common misperception exists that all damages are the fault of the carrier. In reality, the cause of damage and shortage issues can occur prior to shipping as well as after delivery. Uncovering damages after the fact often results in a denial of responsibility.  Applying sound receiving procedures however, can minimize those claim denials and recover dollars that would otherwise be lost.

 

So what can you do to?  We suggest the following:

 

1.   Establish the Rules.  All jobsite personnel responsible for receiving shipments should be properly trained in receiving procedures and fully understand the significance of neglecting their responsibility in the process. 

2.   Secure Buy-in.  Prepare a document that outlines the steps in proper receiving procedures, then distribute to everyone involved in the receiving of materials. Require that a signed copy be sent back acknowledging their understanding.

3.   ALWAYS Verify.  Jobsite deliveries can be hectic.  Often the goal is to clear the truck as quickly as possible to make way for the next one.  “We’ll deal with it later.”  We say no, that can’t happen.  Do not accept “We’re too busy” as an excuse for improper or sloppy receiving procedures. Not taking time to conduct a thorough inspection and notate shortages and damages will result in denials of claims by most carriers.

4.   Remember, You’re in Control.  Do not accept “the truck driver wouldn’t wait” as reason for not inspecting the shipment. The carrier Bill of Lading is a legal document and proof of transfer of ownership. The driver cannot leave until a signature is obtained.

5.   Report Damages Promptly.  Carriers should be notified as quickly as possible of intent to file claim.  If the product was received short or damaged, and notations made on the bill of lading, most carriers will accept freight claims up to 9 months from the date of delivery.  Concealed damage (no notations made at time of delivery), requires much faster notification.  Most carriers adhere to the industry standard of 5 days or less from time of delivery.  If claims are not filed within these time parameters, the carrier will have grounds to deny the claim. 

6.   Retain Product & Packaging.  Do not discard product or packaging until the claim has been fully resolved.  Carriers have the right to inspect the product and mitigate claims where possible, and salvage goods to offset losses when claim is fully awarded.  Moving goods within a facility or disposing of packaging without inspection may result in a denial of claim.   


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