What is a Concealed Claim? Part 2

What is a concealed Claim?

When the buyer fails to indicate Damage of Possible Damage to the contents.

When the buyer signs a Clear Delivery slip and damage is found after delivery. This is referred to as Concealed Damage.

Most freight companies will offer to pay 1/3 of the claim. They are under no obligation to do so. Each Concealed Claim you handle, will follow a Protocol but the end result will differ.

Example:

You shipped a China Cabinet. The hutch is damaged, left top corner is smashed. Glass is intact and buffet is fine. The Consignee accepted to be in good condition.

How to file this claim and calculate the cost? Without any proof of Damage caused by the Freight Company; your claim will be denied. Provided that you have proof of the condition you shipped it out in the Freight Company may offer a 1/3 of the claim.

A third of the cost to replace the unit will not be enough. Considering you did not cause the damage. Here is what I would do:

1) Review the images

a. Images of the Hutch where the damage is

b. Images of the packaging

2) Calculate the fees

a. Cost of purchasing a China Cabinet

Sometimes your vendor may be willing to sell you only the hutch. If not you are look at full price.

b. Cost of shipping to your from vendor

c. Labor

d. Material

e. Shipping to Customer

It is likely that 1/3 will not cover the cost.

I would go back to my Customer and offer:

Option A:

The 1/3 for them to repair the unit themselves and point out nicely; had they indicated the damage on the BOL (delivery slip) we would have been able to file the claim properly.

Option B:

Provide them with the total cost of purchasing a new one and shipping etc… The outcome will vary. Only the Consignee (Buyer) knows how it was really damaged and the extent of the damage. They might fix it or cover it.

……..

Now, it is always a good idea to allow the Buyer in on the action. This helps educate them on future shipments. The Buyer will also understand that you are looking out for their best interest.

On concealed claims, I recommend that you sign the case over to the Consignee (Buyer). This way that can call in to the Freight Company and obtain updates and have the check made payable directly to them. Of course, make yourself available to assist with any documentation they may need.

If you are replacing the item have the Buyer pay you directly. Concealed claims are the most time consuming. Keep a bottle of Tylenol handy for those headaches. I always find it helpful to inform the Buyers of the possible outcome for not properly inspecting the shipment. J

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