Carrier's Liability Insurance
Carrier’s Liability Insurance, also known as Cargo Liability Insurance or Freight Liability Insurance, is a type of insurance coverage specifically designed for companies or individuals involved in goods or cargo transport. It protects against potential liability and financial losses arising from damage, loss, or theft of the goods.
Carriers, such as trucking businesses, freight forwarders, shipping companies, and other entities involved in the transportation of products, are covered by Carrier’s Liability Insurance. It covers various modes of transportation, including road, rail, air, and sea. It offers protection against loss of goods due to vehicle overturning, hijacking, collision or crashing.
Carrier’s Liability Insurance is essential for businesses or individuals engaging in goods or cargo transport. Trucking Companies, Freight Forwarders, Shipping Companies, Air Cargo Carriers, Rail Transport Providers, Third-Party Logistics (3PL) Providers and Independent Transport Operators can consider Carrier Liability Insurance.
It’s worth noting that Carrier’s Liability Insurance is for the carrier owner, responsible for transporting the goods. However, the need for this insurance can also extend to shippers or cargo owners who want to ensure that the carriers they engage are adequately insured when contracting transportation services.
LIfecycle Fire and General offers carriers owner coverage plans according to industry standards and covers their specific operations and risks
Here are key features and aspects of Carrier’s Liability Insurance
- Cargo Protection: The insurance policy covers the carrier’s liability for physical loss, damage, or theft of the cargo while it is in its custody, care, and control. It can include scenarios such as accidents, collisions, fire, theft, acts of nature, or other covered perils.
- Liability Limits: The policy establishes the maximum responsibility limitations of an insurance company against any specific damage or claim. These restrictions depend on cargo weight, value, or kind.
- Legal Defense Costs: It offers coverage for legal defence costs if there is a claim against the carrier. It can include legal fees, court costs, and settlements or judgments in favour of the claimant. It does not cover any cost for fines or penalties.
- Additional Coverage Options: It offers coverage for refrigerated or perishable goods of high value. Also, cover goods and specialised cargo in transit to international destinations.
- Professional indemnity coverage: This insurance will cover the costs of hiring a lawyer and any potential compensation to the opposing party.
The Carrier’s Liability Insurance coverage can vary depending on the insurance policy and insurer, but here are the common elements covered by Carrier’s Liability Insurance
- Theft and Pilferage: The policy typically covers losses resulting from theft or pilferage of the cargo. It includes events of stolen cargo or its parts going missing during transit.
- Loading and Unloading: Carrier’s Liability Insurance often extends coverage to loading and unloading operations, protecting against damages or losses during these processes.
- Inherent Nature of Goods: Certain types of cargo are so delicate that they get loss or damaged during transportation, even without any negligence on the carrier’s part. Carrier’s Liability Insurance covers losses of all such goods.
- Third-Party Liability: If the carrier is liable for damages or injuries caused to third parties while transportation, Carrier’s Liability Insurance can offer coverage for the resulting legal liabilities and associated costs.
Carrier’s Liability Insurance generally does not cover
- Certain types of cargo like hazardous materials, live animals, perishable goods, valuable items (e.g., jewellery, fine art), or highly fragile items.
- For losses or damages due to insufficient or inadequate cargo packaging.
- Losses resulting from delayed delivery of the cargo.
- Losses caused by uncontrollable events or acts of God, such as earthquakes, floods, storms, or other natural disasters.
- Losses arising from a carrier’s failure to meet contractual obligations or specific requirements outlined in the transportation agreement.
- Financial losses suffered by the cargo owner or shipper, such as loss of profits, business interruption, or consequential damages resulting from the cargo loss or damage.
- Cargo loss, damage, or theft if the carrier commits intentional acts, willful wrongdoing, or fraud.
The carriers, shippers, and cargo owners should carefully review their insurance policies, understand the terms and conditions and be aware of any exclusions or limitations.
LIfecycle Fire and General are insurance professionals specialising in transportation insurance. We assist our clients in obtaining enough coverage against any potential gaps. We know that different carriers may have varying insurance requirements based on the nature of their operations, contractual obligations, or regulatory compliance. Hence, we offer flexible plans according to our client’s needs.