What Is covered Under Freight Liability Insurance?
Freight liability insurance is a popular form of cover for many freight forwarders, carriers and warehouse keepers. Essentially, it provides legal liability protection for the loss and damage of goods when transported in freight by air, sea, road or rail.
The specific coverage you’ll get will depend on various local and international laws as well as trading regulations. Due to the various complexities of the process, it can be difficult to get your head around the specifics of freight liability insurance without appropriate knowledge and experience.
If you’re in need of freight liability insurance, get in touch with us at The Insurance Broker and we’ll advise you on how to look for, and attain, the most appropriate level of cover for your business. Our team has been specialising in this type of insurance for years and can walk you through the process from start to finish.
Do I Need Freight Liability Insurance?
If you’re transporting goods internationally, whether it’s standard goods for sale or special cargo, you’ll need freight liability insurance. This will also apply if you have goods in your custody and control for any amount of time.
Based on several factors, including your cargo type, standard trading conditions, international laws and conventions, cover can be arranged to sufficiently protect you from various unfortunate circumstances that could lead to the damage or loss of property. Examples of entities that will require this form of insurance include:
- Carriers who undertake the commercial transport of goods. These businesses will naturally be responsible for transporting goods and to a certain standard.
- A freight forwarder, who is tasked with organising the shipping of goods, will always need to be sufficiently covered. The process will include the creation of appropriate transport routes and logistics, storing items, and processing forwarding arrangements with the relevant parties.
- Warehouse keepers are liable for the damage or loss of goods when in their care. This makes it crucial to have sufficient cover in place when handling the commercial storage of goods.
What Are the Risks of Not Having Freight Liability Insurance?
As with all insurance, the actual risk you are protecting yourself against can be varied. Some outcomes such as clerical errors or miss consignment od a delivery can be quite commonplace, however, others are less likely (but more severe in consequences) such as natural disasters. Nevertheless, there are many things that could derail the transportation goods to its appropriate destination.
What Are the Main Benefits of Freight Liability Insurance?
As well as peace of mind, there are several benefits to having sufficient insurance cover for your freight activities.
- Legal liability protection in case your goods are lost or damaged during transportation
- Correct coverage under standard trading conditions and international conventions
- Professional advice for insuring your products and equipment
What Does Freight Liability Insurance cover?
An insurance package taken out to protect you from risks of liability can cover several aspects. As well as offering you legal protection to handle unjust claims against property damage or loss, it will protect you in cases where property in your care has been damaged, lost or wrongly processed.
Contractual terms are agreed based on a number of factors to determine your specific liability when handling the transport or storage of goods. Your cover policy may greatly differ depending on if you’re a freight forwarder, transporter or warehouse keeper.
What Does Freight Liability Insurance Not Cover?
You will need to check with your insurance provider as to the specific terms of your agreement, but freight liability insurance usually doesn’t certain unavoidable causes of damage or loss.
For example, acts of god, acts caused by government or public authorities, issues caused by the faulty or improper nature of the products themselves, are not typically covered under most standard policies.
Should I Get Freight Liability Insurance?
The quick answer to this is yes. The long answer is: liability of a freight forwarder is dependent on the role they play in the overall process of storing or transporting goods. But the moment any contracted cargo is in your control and custody, you will be tasked with numerous responsibilities.
During this time, your cargo and business will be exposed to several risks, including physical loss or damage of goods, abandonment of cargo, local customs fines and regulations, and human mistakes relating to the improper delivery or release of cargo to the correct location.
Ultimately, all of this and more could lead to liability risks that could cost you hundreds of thousands of pounds. At The Insurance broker, we like to make sure none of our clients ever have to face this reality by giving them the most appropriate levels of cover for their operations.