CARGO INSURANCE POLICY & PROCEDURE

Date of Re-Issue:
Next Revise / Review Date:
Originally Issued:
Approved by:

September 1, 2015
December 9, 2014
Pamela Mullin, CFO

PURPOSE
The purpose of this policy is to outline:
Cargo insurance current limits;
Cargo insurance and contract policies and procedures; and
Cargo insurance employee responsibilities.

SCOPE
This policy applies to all customer cargo in KBDs possession, which includes all cargo currently
loaded onto KBD equipment.

CARGO LIMITS
Currently insured through Old Republic Insurance, the following limits apply:

$250,000 cargo limit per truck;

$1,000,000 cargo limit per terminal; and
$1,000,000 cargo limit per catastrophe.

CARGO VALUATION
It is important to note that limits agreed to within a signed customer contract will supersede a
Bill of Lading, Customer invoice, or any other documentation stating shipment value. For
example, if a KBD representative signs a contract that agrees to pay $5/lb for cargo damage or
loss, then that will be the insured value. When there is no signed contract or no cargo insurance
clause within a signed contract stating differently, then the following limits will apply:

CANADA
o The higher value of $2/lb ($4.40/kg) or the value stated on the Bill of Lading;
U.S.A.
o Valuation at the time of shipment (Customs invoice or documentation).

POLICY & PROCEDURE

To negate the risk of a claim exceeding insurance coverage, the following steps will be taken:

CARGO COVERAGE: Ensure that current cargo coverage is adequate with insurer per
truck, per terminal, and per catastrophe;
ISSUE BILL of LADING: Ensure that for a freight movement originating in Canada, a Bill of
Lading has been issued that states the value of the freight at time of shipment;
DO NOT EXCEED CARGO LIMIT: Ensure that for a freight movement originating in either
Canada or the U.S., Dispatch has been notified and approval received to accept freight if
the value at time of shipment exceeds $250,000; and
FILE SIGNED CONTRACTS: Ensure that signed contracts with customers and third-party
load providers requesting coverage greater than $2/lb (for freight originating in Canada)
or greater than $250,000 per load (for freight originating in the U.S.) have been
approved and filed with Old Republic.

RESPONSIBILITIES
The Drivers will:
Issue a Bill of Lading for all freight received, whether the freight movement originates in
Canada or the U.S.A., ensuring that the value of cargo is noted.
Obtain approval from Dispatch before leaving the customer when the value of a load:
o exceeds $2 per lb originating from Canada; or
o $250,000 per load originating from either Canada or the U.S.A.
The Dispatcher will:
Verify the value of all loads upon receipt of customer invoice or customs documents;
Notify the Operations Manager immediately when it is noted that a customer invoice or
document exceeds either $2 per lb (originating from Canada) or $250,000 per load
(originating from either Canada or the U.S.A.), requesting that the driver not move until
approval has been received.
The Operations Manager will:
Process requests from the Dispatch team when the value of cargo is above $2 per lb
(originating in Canada) or $250,000 per load (originating from either Canada or the U.S.);
Review contracts from customers and third-party load providers to:
o remove cargo clauses above limits stated above; or
o when higher limits agreed to, ensure that Old Republic is in receipt of a copy of
the contract signed by both parties. (Without the signed contract, KBD will be
financially responsible for the value of freight above $2 per lb (for loads
originating in Canada) or the valuation at time of shipment (for loads originating
in the U.S.A.));
Send contract to Insurance broker (Patti) for review;
Insurance broker (Patti) sends to Insurer (Old Republic) for review:
Insurance broker (Patti) returns contract to KBD with feedback;
KBD revises contract as deemed fit, signs and returns to issuer;
Issuer signs contract;
KBD requests a copy of the signed (by both KBD and issuer) contract
from the issuer;
KBD forwards a copy of the signed contract to Insurance broker (Patti);

Insurance broker (Patti) files a copy of the signed contract with Insurer
(Old Republic).
Apply progressive discipline measures when the policy responsibilities, as outlined
above, have not been followed by drivers and members of the dispatch team;
Advise Owners if/when cargo limits outlined in CARGO LIMITS section are not adequate
and coverage needs to be increased.

The Credit Manager will:

Notify the Operations Manager if a driver fails to complete a Bill of Lading for a
customer.