Confessions of a claim manager: What we wish brokers knew about claim management

For most brokers, freight claim management is a hassle that cuts into generating revenue. But for Dick Lucarelli of CDS, claim management isn’t a hassle – it’s his entire business. However, even though Lucarelli is doing the filing and negotiating with carriers, the success or failure of the claim often depends on the steps that the broker takes before the claim even lands on his desk. Here’s what Lucarelli wishes his brokers would do:

Enforce driver documentation

One of the biggest issues Lucarelli deals with is incomplete documentation, but it’s a problem that can be fixed. It’s difficult to get your clients to send claim documentation, and it’s even harder when the consignee isn’t your client. Lucarelli’s solution? Brokers should require the drivers to send the most important documentation. “Everyone has a cell phone; drivers should take pictures of the load and bill of lading at the point of origin.” This would document that the shipment was properly loaded and free of exceptions.

Then, at the destination, the driver would take a picture of the load while still in the trailer, and take a photo of the delivery receipt. If there was damage, the driver would take additional pictures of the damaged products and packaging.

“If the driver doesn’t send you all of the photos and documentation, you, the broker, should withhold payment,” says Lucarelli. “Of course, you would need to include the carrier’s claims responsibilities in the master carrier agreement.” But once you did that, you would guarantee yourself prompt photo documentation for your claims.

Train your clients to notify you of damage immediately

Another major killer of claims is the time lag between the incident and when it’s filed. “We get a lot of claims where we don’t find out about the damage until weeks or months after it’s happened,” says Lucarelli. Coupled with the lack of documentation, it’s very difficult to recover these claims. However, there’s a way around this issue.

“As a freight broker, you need to set the expectations that your client will report the damage immediately,” says Lucarelli, “and the trick is to train your clients on these expectations before they ever receive a damaged shipment.”

To do this, Lucarelli recommends sending the consignee a checklist prior to every delivery. The checklist should outline what they should check to ensure that the shipment is in good order, as well as instructions for what to do if they find loss or damage. The list should also include a box for them to tick when they have received the shipment in good order.

By requiring the consignee to send this form back to you immediately, even when there is no loss or damage, you then train them to communicate with you about their shipment immediately after it arrives. “You need to get them into the habit of talking to you,” says Lucarelli. This will be essential in the event of a problem with the shipment.

If the consignee does not send the form back to you soon after receiving the shipment, follow-up with them to let them know that you need this information.

This is the low tech solution. There’s also software designed for this purpose. “TranSolutions Inc. has just come out with a new product to deal with incident reporting – OS&D Incident,” says Lucarelli. “It’s an online database that allows you to track an incident as it unfolds.” This incident is then stored in the system and can be converted to a claim later, if needed.


Get yourself listed on the insurance agreement

Savvy brokers are careful with insurance and check to make sure that their client’s goods are protected under the carrier’s insurance policy. But if the carrier is listed on the insurance, but you, the broker, are not, it can make claim recovery cumbersome. “If the insurance company denies the claim, then we want to confront them to find out what the issue is,” says Lucarelli. Once he knows what the reason for denial is, he can craft an argument against it. “But the insurance company will refuse to talk to us because only the carrier, not the broker, is listed on the certificate. Whereas if the broker was listed, then we could talk to the insurance company directly.”

Track everything

Paper trails are essential in claim management. The claim and any follow-up letters need to be sent by email or registered mail, so there’s a record that it’s been sent. Save all of your emails to and from the carrier and the insurance company, as well as dates that you’ve called to follow up, and who you spoke to. CDS uses software to keep track of his claim activities. “I use MyEZClaim, it has a diary function that tracks all claim activities and communications within the claim record.” He’s serious when he talks about tracking everything – his diary log can be 2 - 3 pages long for any given claim.

Finally - get familiar with claims best practices

“Most brokers don’t have the time to become experts on claim management,” says Lucarelli. And of course, that's how Lucarelli has built his business. But for brokers who do want to learn best practices, there are plenty of whitepapers, freight claim forms and processes available in our resources section.


Dick Lucarelli can be reached through his website at

For more information about OS&D Incident, email us here.