Covering the passage of goods from one place to another for hire and reward.

At common law you would be responsible for loss or damage to goods in your custody caused by your negligence. This position can be, and usually is, amended by contractual agreement or statutory provision.


The liabilities assumed by you or imposed on you for loss or damage to goods can be significant and financially penal.

Contractual Agreement

Trade Contract Conditions vary considerably and cover all aspects of the contract, not just liability for the goods being carried.

Trade bodies have standard conditions for the use of members, i.e. BIFA, RHA and FTA. Other carriers have designed their own conditions.

Liability Under Statute

CMR (The Carriage of Goods by Road Act 1965) brought into British law the provisions of the Convention on the Contract for the International Carriage of Goods by Road, to standardise the liability of carriers undertaking international movement of goods throughout participating countries.

The Warsaw Convention liability can also be imposed on carriers in certain circumstances by Airlines for road carriage portions of an airfreight consignment.

You can protect yourself against these liabilities with a Freight Forwarders Insurance tailored to your own specific requirements. Freight Forwarders Insurance is usually inexpensive and is often a mandatory requirement of trade associations such as BIFA and a number of your potential Customers.

The Freight Forwarder’s Responsibilities

Freight Forwarders provide transport solutions to businesses that want to send goods or cargo from one country to another.

Once entrusted with someone’s good, the freight forwarder becomes legally responsible for taking all necessary steps and precautions to ensure the safety and transport of the cargo. This means the forwarder is liable to the owner for any damage or loss. While the forwarder is entitled to limit the amount they are accountable for, negligence could lead to a demand for compensation.

To protect themselves against legal risks, freight forwarders can take out additional transport liability insurance.

What does Freight Liability Insurance Cover?

Freight Liability Insurance is not cover for cargo. Instead, it is intended to protect Freight Forwarders from ‘errors and omissions’ as well as legal liability.

Anyone transporting goods across long distances may benefit from seeking transport liability insurance. This is because, at common law, the forwarder may be held responsible for loss or damage to goods in their custody.

This means the insurance covers forwarders against costs such as:

• Legal costs for defensive claims
• Containers and trailers on hire
• Clerical errors and omissions by the forwarder’s company
• Financial loss incurred by following loss or damage to goods
• Temporary storage costs that may be incurred following an incident

Cargo will be included in the cover depending on the freight forwarder’s terms and conditions. These would need to be understood and incorporated within the insurer’s policies.


Work with leading insurers to benefit from expert advice on the specific risks and requirements you, as a freight forwarder, might face. Get in touch for a consultation today.