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FedEx liability capped at $100 in dispute over $250,000 missing watch
An insurer paid $250,000 under a private collections policy but the Eighth Circuit upheld FedEx’s shipping cap, leaving the insurer to absorb almost the entire loss.
Insurance Business reports that a federal appeals court ruled Federal Express owed just $100 for a luxury watch that disappeared while in transit, upholding a liability cap that sharply limited recovery on a shipment valued at $250,000.
According to the case, Pennsylvania Insurance paid the insured couple $250,000 under a private collections policy and then sued FedEx as subrogee after the watch was lost when the package was routed through a Montana golf club and later forwarded to Arizona.
The Eighth Circuit said FedEx’s service guide tied liability to the declared value of a shipment, and that the carrier’s limit was $100 unless a higher value was declared and paid for, with jewelry shipments capped at $1,000. The court also rejected arguments that state law claims could proceed despite federal limits on regulating air-carrier routes, prices, or services.
The insurer argued a FedEx employee stole the watch from an unmonitored area, but the court found no evidence that FedEx “appropriated the property for its own use or gain,” and held that theft by a single employee would not by itself void the cap. The court further found the golf club had notice through a 2009 pricing agreement and the FedEx website workflow that included acceptance of the service guide and an option to purchase higher liability limits.