Carrier Legal Liability Insurance
When a company has merchandise that must be transported, they should consider the risks involved, such as an unexpected loss, damage or delay that may occur during transit. The purpose of a carrier legal liability insurance policy is to establish rules pertaining to the rights, responsibilities and liabilities of freight shippers and carriers in the event of damage, loss or delay. Gallant Risk & Insurance Services Inc. offers carrier legal liability insurance that covers compensation in the event of loss or damage to products in any stage of the transportation process, from loading to unloading. This type of policy can cover:
- Contamination of food and beverages
- Deterioration of perishable goods
- Excess stock
- Global transit risks
- Offshore equipment
- Primary stock
- Project cargo, including delay in startup
- Stock throughput
- Trade disruption
Damages to cargo that are directly caused by fire, explosion, flood or water damage or an accident including the carrying vehicle are covered, along with the carrier’s liability for the accident. Salvaging the goods, shipping any remaining cargo and emergency storage costs may all be covered by your policy. If your company suffers a financial loss directly caused by lost freight in the accident, or if legal fees are required, these may also be protected under your carrier legal liability insurance. Any freight forwarder, carrier or warehousing company can benefit from this coverage, and in most cases, it is required by law. Typically, carrier liability coverage protects up to a certain dollar amount per ounce or pound of freight.
Filing a Claim
The shipper is required to provide evidence to prove that their products were in good condition when shipped and the level of damage sustained. Claims must be filed within a specific window of time after the event, so it is important to file immediately. The carrier then has a timeframe to acknowledge a business’ claim and respond. If the damage is due to an “act of God” or shipper negligence, such as inadequate packaging or loading, then the carrier is rarely at fault.
Protecting Your Products
Any enterprise that requires the transportation of products has risks involved with the shipment and delivery of their goods. Accidents can occur at any moment, so it is best to cover your carriers prior to an unexpected situation that can lead to a significant loss for your company. Associated costs for legal fees and losses can become a burden if insurance isn’t set in place. Speaking directly with an agent can provide peace of mind and a customized insurance plan to assist your company in these matters.
Frequently Asked Questions About Carrier Legal Liability Insurance
What are the liabilities of a carrier?
A freight carrier’s legal liability defines the degree to which a carrier is liable for damage or loss of goods on transit. Essentially, when a freight carrier is liable for damage or loss of a shipment, the cargo owner can file a formal claim seeking monetary compensation for the loss. However, there are several stipulations and limitations to be considered with each case of damage or loss. Typically, when goods are damaged or lost in transit, the cargo owner needs to prove carrier liability using sufficient proof and documentation.
Are there limitations to the carrier’s legal liability insurance coverage?
Even where a carrier has been found liable for a loss or damage, there could still be limits to how much that carrier must pay the cargo owner. These limitations are typically determined by several factors, including the transportation mode and other variables such as the specific international conventions, treaties, and domestic/ international governing bodies. Without these limitations, carriers would be wiped out of business by exorbitantly higher claims. In the US, the coverage limitation stands at $500 per shipping unit if you are using ocean transport mode and 22 SDR (~ $30) per kg for air transport mode.
When does carrier legal liability insurance policy coverage commence?
The policy typically commences with loading cargo on a vehicle, truck, ship or plane. It stays in force until the cargo is unloaded at the discharging point or after the expiry of seven days after the first arrival of the cargo vessel at the destination point, whichever may first occur.
What are the exclusions to carrier liability coverage?
Several circumstances that cause damage or loss of goods may fall outside the liability of a carrier altogether. These circumstances are typically outlined in the laws and international agreements regulating liability. They include losses or damages that result from natural disasters, the act of public authority, the inherent nature of goods, acts of war and more.
Is carrier legal liability insurance a reliable policy?
Carrier liability insurance is required by law in most cases. It is advisable that you add an “All Risk” cargo insurance policy to your carrier liability insurance if you want to be genuinely covered for loss protection that equals the actual value of the goods you are shipping.