The Carmack Amendment: Ultimate Guide

The Carmack Amendment is the federal law that governs freight loss or damage claims in interstate shipments. It creates a single national rulebook that decides who’s liable when cargo is lost or damaged, replacing the old patchwork of state-by-state laws.

Understanding the Carmack Amendment and Why It Matters

Think of the Carmack Amendment as the official rulebook for freight claims in the U.S. Before this law was passed way back in 1906, trying to resolve a claim was a nightmare. The liability rules could change dramatically just by crossing a state line. It was a legal free-for-all that made getting paid on a claim unpredictable and incredibly frustrating for shippers and carriers alike.

The Carmack Amendment (found at 49 USC 14706 ) brought much-needed order by creating a single, national standard. It made it clear that as an interstate carrier, you are liable for loss or damage, period—unless you can prove one of a few specific exceptions applies. This simple change made the whole process more predictable for everyone involved in the transportation industry.

Clearing Up a Common Misspelling

You’ve probably seen it spelled “Carmack Ammendment” online, with two ‘m’s. That’s a super common typo, and it even gets more monthly searches than the correct version. It’s referring to the exact same law. Search engines are smart enough to know what you mean, but when you’re dealing with legal documents or professional correspondence, stick with the correct spelling: Carmack Amendment. We’ll use the right one here, but it helps to know that the “Carmack Ammendment” spelling points to the same critical regulation.

Why This Law Is Critical for Your Fleet

For your trucking company, getting a handle on the Carmack Amendment isn’t just about knowing legal trivia; it’s fundamental to protecting your business from the ground up. This one law directly impacts three core areas of your daily operations:

• Freight Claims: It spells out the entire claims process and establishes your presumed liability the moment a customer reports lost or damaged goods.
• Broker Agreements: While Carmack sets the baseline for liability, you have to be careful not to sign away your rights in contracts with freight brokers, as they can shift more responsibility onto you.
• Cargo Insurance: Your motor truck cargo insurance policy is literally built around the liability standards set by Carmack. It dictates how your insurer investigates, settles, and ultimately pays out claims.

Mastering the rules of the Carmack Amendment gives you the tools to defend your company against unfair claims, negotiate better broker agreements, and ensure your insurance coverage aligns with your real-world risks. It’s the foundation of managing liability for everything you haul.

Understanding Your Liability in a Freight Claim

When it comes to a freight claim, the Carmack Amendment sets a pretty clear starting point: as the carrier, you are generally presumed to be liable for any cargo loss or damage. This is a legal concept known as “strict liability.”

What that means in the real world is that the shipper doesn’t have to prove you or your team were negligent. All they need to establish are three basic facts:

• The cargo was in good shape when you picked it up
• It arrived damaged (or didn’t arrive at all), and
• The total dollar value of their loss.

It can definitely feel like you’re starting on your back foot, but this is exactly why knowing the rules is your best defense.

Check out this article to see why commercial truck insurance rates are so high and where we expect them to go next year. 

The Five Key Defenses

While the law defaults to carrier liability, it’s not a done deal. The Carmack Amendment provides five specific, legally recognized defenses that can completely clear you of responsibility for a claim. Think of these as your legal toolkit for proving the damage wasn’t your fault.

Here’s a quick rundown of the five defenses available to you. While some are pretty rare, others, like the “Act of the Shipper,” come up all the time.

Defense	What It Means for You
Act of God	This applies to damage from an unforeseeable natural disaster, like a tornado or flash flood, that you couldn’t have reasonably prevented.
Act of a Public Enemy	This is for damage caused by military forces of a nation at war with the U.S. It’s a holdover from another era and almost never comes up today.
Act of a Public Authority	Covers situations where a government agency lawfully seizes or damages the cargo, such as during a quarantine or an emergency road closure.
Inherent Vice	Use this when the goods themselves are the root cause of the damage—think produce that spoils naturally or materials that degrade on their own.
Act of the Shipper	Your most common and powerful defense. It covers damage caused by the shipper’s mistakes, like poor packaging, improper loading, or mislabeling.

Getting a handle on these defenses is the first step toward effectively managing claims and protecting your business when things go wrong. While your liability is significant, there are clear timelines that both you and the shipper have to stick to throughout the claims process.

It’s also important to remember that while your focus with Carmack is on cargo, other complex legal issues can pop up when operating commercial vehicles. For instance, completely different standards apply in cases involving 18-wheeler accidents, which often involve personal injury claims that are separate from any cargo issues. Understanding these distinctions is crucial for managing your fleet’s total risk profile. For more on keeping your assets safe on the road, check out our guide on cargo theft prevention.

Using Your Most Powerful Defense: The Act of a Shipper

Out of the five legal defenses you have under the Carmack Amendment, the “Act of a Shipper” is hands down your most common and most powerful tool. This is your go-to defense when you can prove that the shipper’s own actions—or inactions—were the real cause of the cargo damage.

Think about it. This defense basically shifts the blame back where it belongs. If a shipper uses flimsy packaging for a fragile product or does a poor job stacking pallets inside a trailer, you shouldn’t be on the hook financially when that cargo shifts and breaks. The root cause wasn’t your driving; it was their bad prep work.

The Power of “SL&C” on Sealed Loads

This defense becomes absolutely essential when you pick up a pre-loaded, sealed trailer. If that seal is intact, you have no legal right or physical way to inspect the freight inside. How can anyone hold you responsible for improperly secured cargo you never even saw?

This is where three little letters can save you from a massive claim: S, L & C.

This simple acronym stands for “Shipper’s Load and Count.” It’s a quick note you must write on the Bill of Lading (BOL) or any other shipping document you sign when picking up a sealed load. Adding “SL&C” next to your signature creates a legal record that says:

• The shipper loaded this trailer.
• The shipper is the one responsible for the piece count.
• We, the carrier, never had a chance to inspect or verify the load.

This simple act is a game-changer. By inputting S, L & C, you are legally documenting that you didn’t have the ability to inspect the loading of the cargo. This can be a critical way for you to help protect your company.

Building Your Defense from the Start

Training your team to use “SL&C” every single time is one of the smartest risk management strategies you can have. It’s a proactive step that builds a rock-solid defense before a claim ever even comes up. Without it, the legal assumption is that you accepted the load in good condition, even if you never laid eyes on it.

This practice ties directly into federal rules about cargo securement. Properly noting “SL&C” helps draw a clear line between your responsibilities and the shipper’s, which is a key part of the whole safe transportation framework. For a deeper dive into what’s required, you can review the official FMCSA load securement regulations to make sure your team is always on the right side of the law.

At the end of the day, using the “Act of a Shipper” defense, especially with the “SL&C” notation, is about fairness. It makes sure that liability for damaged freight lands on the party actually at fault, protecting your company from unfair claims.

Navigating Broker Agreements and Carmack Waivers

The Carmack Amendment gives you a solid baseline of protection when a freight claim pops up. But here’s the catch: while you can’t waive those protections with a shipper on a Bill of Lading, you can absolutely sign them away in a broker-carrier agreement.

This is a critical distinction, and overlooking it can put your company in a serious financial bind.

Many freight brokers will slide clauses into their contracts that shift all the liability right back onto your shoulders. These terms can make you responsible for damages that Carmack would normally shield you from, or even force you to give up your right to salvage damaged goods. Once you sign that contract, its terms can legally override the standard protections of the amendment.

Reading the Fine Print: What to Watch For

You have to scrutinize every single broker agreement for language that chips away at your rights. Think of it as a pre-trip inspection for your contracts—you’re looking for red flags that could cause a major breakdown down the road.

Keep an eye out for common clauses that put you at risk:

• Full Value Liability: Be wary of language that makes you liable for the “full actual value” or “replacement cost” of the freight, especially if the BOL lists a lower declared value.
• Waiver of Salvage: Look for clauses that say you give up your right to take possession of and sell damaged cargo. This is a key way you can recoup some of your losses after a claim.
• Indemnification Clauses: Broad “hold harmless” agreements can be dangerous. They could make you responsible for claims that go far beyond what the Carmack Amendment would ever require.

Signing a broker agreement that waives Carmack protections can directly mess with how your motor truck cargo insurance responds to a claim. Your policy is built around Carmack’s rules. If you voluntarily agree to take on more liability, your insurance might not cover the difference, leaving you to pay out of pocket.

This is exactly why having a good handle on your motor truck cargo insurance is non-negotiable. When you work with certain freight brokers or shippers, you often have to meet their specific insurance standards. For instance, check out our guide on UIIA insurance requirements, which breaks down what you need to have in place for intermodal shipments. 

The Carmack Amendment isn’t new; it was created back in 1906 as part of the Hepburn Act. It was designed to bring order to a chaotic system where railroads could easily limit their liability, leaving shippers with almost no way to recover their losses. You can learn more about how this federal law created a uniform standard to get a better appreciation for the protections you’re defending.

By carefully reviewing every broker contract, you’re making sure this century-old law continues to protect your business just like it was meant to.

How Carmack Impacts Your Motor Truck Cargo Insurance

Think of your Motor Truck Cargo insurance policy as a direct response to the Carmack Amendment. The two are completely intertwined. Carmack sets the rules for your liability when freight gets lost or damaged, and your insurance policy is the financial tool you use to cover that liability.

You can see this connection most clearly in how cargo losses are settled. Like the MCS-90 form does for your auto liability coverage, the whole point of a Carmack claim is to “make the claimant whole,” which means paying for the actual value of the goods that were lost or damaged. This is why your insurance is structured to pay out the invoice value of the cargo—not speculative losses like the shipper’s lost profits because a delivery was late. This is why understanding your coverage limits is a huge piece of the overall FMCSA insurance requirements you have to meet just to operate legally.

Check out our guide to the 7 Best Truck Insurance Companies here!

Connecting Your Actions to Insurance Outcomes

Every single thing your team does on the road can directly affect an insurance investigation down the line.

For example, when you correctly document “SL&C” on a sealed load, you’re handing the claims adjuster a powerful piece of evidence for the “Act of a Shipper” defense. That simple note can be the very thing that protects you from liability and stops a payout against your policy.

It’s the same story with the broker contracts you sign. If you agree to waive Carmack protections and take on full liability, your insurance provider might just deny the portion of the claim that goes beyond standard Carmack rules. When that happens, you’re stuck paying the difference right out of your own pocket.

Think of your cargo policy less as a safety net and more as a proactive tool. Your team’s solid grasp of the Carmack Amendment is what activates its full protective power, ultimately safeguarding your company’s bottom line.

The Carmack Amendment’s influence is massive, governing almost all interstate freight claims in a country that moves over 11.5 billion tons of freight every year. Its principle of federal preemption means shippers are limited to the value-based compensation laid out in the law; they can’t go after state-level remedies like punitive damages. This federal law is what creates a single, uniform standard for everyone in the industry.

Your Carmack Amendment Questions Answered

What Is the Difference Between a Broker and a Carrier Under Carmack?

Under the Carmack Amendment, a motor carrier is the one physically moving the freight, and you’re held to a “strict liability” standard for any loss or damage. A freight broker, on the other hand, is just the matchmaker—they arrange for transportation but don’t actually perform it. Brokers aren’t automatically on the hook for Carmack liability. But that line can get seriously blurry. If a broker acts like the carrier by putting their name on the BOL or micromanaging your work, courts might just decide to treat them like one, sticking them with the bill for a claim.

Why Is the Misspelling “Carmack Ammendment” So Common?

Great question! The incorrect spelling “Carmack Ammendment” is an incredibly common typo. It’s probably because so many words in English end with “-ment,” like government or amendment. Even though it’s technically wrong, it’s searched for so often that you’ll see people in the industry use it all the time. We just wanted to point that out so you know that whether you see it spelled with one ‘m’ or two, it’s all talking about the same federal law for interstate freight claims.

Can I Waive the Carmack Amendment in a Contract?

Yes, but only under very specific conditions. You absolutely cannot waive Carmack protections on a standard Bill of Lading with a shipper. However, you can waive certain Carmack rights inside a signed contract, which you’ll see most often in broker-carrier agreements. Brokers love to slip in clauses that crank up your liability way beyond what Carmack requires, so you have to read those contracts with a fine-tooth comb before you sign anything.

What Does “S, L & C” Mean and When Should I Use It?

“S, L & C” is shorthand for Shipper’s Load and Count. You need to write this on the Bill of Lading or any other shipping document you sign anytime you pick up a pre-loaded and sealed trailer. By adding “S, L & C,” you are legally stating that you had zero opportunity to inspect the cargo or verify the piece count. This is a vital step in building an “Act of a Shipper” defense, as it kicks the responsibility for bad loading or incorrect counts right back to the shipper where it belongs.

How Does Carmack Affect My Insurance Settlement?

Your Motor Truck Cargo insurance policy is built around Carmack’s liability rules. The whole point of the law is to “make the claimant whole,” which means covering the actual value of the lost or damaged goods—almost always the invoice value. What it does not cover are speculative losses like the shipper’s lost profits. If you sign a broker agreement that makes you liable for more than what Carmack demands, your insurance policy might not cover that extra risk, leaving you to pay the difference out of your own pocket.

How Long Does a Shipper Have to File a Claim?

Under federal law, the shortest amount of time you can give a shipper to file a written claim is nine months from the delivery date. If the whole load went missing, it’s nine months from the expected delivery date. This deadline has to be spelled out clearly on your Bill of Lading.

What Happens After a Claim Is Filed?

Once you get a written claim, the clock starts ticking. You have 30 days just to acknowledge you received it. After that, you’ve got 120 days to provide a formal written response—either paying the claim, making a settlement offer, or officially denying it with your reasons.

Does Carmack Apply to Intrastate Shipments?

Nope. The Carmack Amendment is a federal law that only covers interstate transportation—meaning shipments that cross state lines. Any shipment that starts and ends in the same state is governed by that state’s own laws, and believe me, those can vary wildly.

Are There Limits to My Liability?

Yes. While you’re presumed liable, you can cap your financial exposure by setting up a “released rate” or “declared value” in your shipping paperwork. This is where the shipper agrees to a lower liability limit in exchange for a cheaper shipping rate. For this to hold up, you must give the shipper a clear choice between the limited liability rate and a full-value rate.

What Is a BOC-3 and How Does It Relate to Carmack?

A BOC-3 (Designation of Process Agents) is a mandatory federal filing that assigns a legal agent in every state to accept court papers on your behalf. While it’s not technically part of the Carmack Amendment, it’s a critical requirement for keeping your operating authority active. If a shipper or broker files a lawsuit against you under Carmack, the legal summons will be delivered to your BOC-3 agent. You can learn more about how to correctly file your what is a BOC-3 to make sure you stay compliant and don’t miss a critical notice.

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Quick Reference for Carmack Amendment Deadlines

Keeping track of deadlines is one of the most stressful parts of managing claims. Missing a date can cost you dearly. Here’s a simple table to help you remember the key time limits for filing claims and lawsuits under the Carmack Amendment.

Action	Minimum Time Limit Allowed in BOL	Statute of Limitations for Lawsuit
Shipper Files Initial Claim	9 months from date of delivery (or expected delivery)	N/A
Carrier Acknowledges Claim	30 days from receipt of claim	N/A
Carrier Makes Final Decision	120 days from receipt of claim	N/A
Shipper Files Lawsuit After Denial	N/A	2 years and 1 day from the date the carrier provides written denial

Think of these as the absolute minimums. If your Bill of Lading gives shippers more time, that’s what will be enforced. But if it gives them less, it’s not legally binding.

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Managing the fine print of the Carmack Amendment on top of everyday DOT compliance can feel like a full-time job. My Safety Manager offers a complete solution to handle your driver qualification files, CSA scores, drug and alcohol programs, and more, so you can focus on running your business. Visit My Safety Manager to see how we can help you stay compliant and protected.