Cargo insurance and carrier liability: what to check

“The carrier is responsible for the goods” does not mean every loss will be paid at full invoice value. Liability for carriage and insurance of the cargo interest are different bases for a claim.

Before accepting protection, identify the product, who benefits and what can trigger payment. Do not decide from a “cargo protection” label alone.

Two different foundations

Carrier liability depends on the applicable contract and law. Carriage scope, cause of damage, defences, limits and deadlines can matter. The amount lost does not automatically determine the amount payable.

Cargo insurance operates under its policy conditions. Establish the insured subject and interest, period, route and risks. A carrier's lack of liability does not by itself decide whether insurance responds; that needs a separate assessment.

A carrier's or forwarder's liability policy is not automatically cargo insurance purchased for your shipment. Ask for the relevant document rather than relying on “the company is insured”.

An add-on may not be insurance

Check whether an offer provides insurance or extends contractual liability. For example, Hapag-Lloyd explicitly describes Cargo Shield as extended liability rather than insurance.

That distinction is not a recommendation between products. Compare the actual contracts. This article does not reproduce advertised prices, protection amounts or variant availability.

Compare questions rather than labels

Do not equate a per-container limit with a per-event limit. For several units, ask how limits apply to the shipment as a whole.

“All risks” still requires reading

A broad label does not remove exclusions or duties. Ask about scenarios relevant to your cargo: unsuitable packing, temperature, moisture, delay or consequential losses.

These are not described as identical exclusions under every policy. Read the complete wording and endorsements, which may alter the basic scope.

Public Chubb Quick Cargo 2023 conditions illustrate document structure and the importance of clauses. They do not confirm current product availability or your shipment's terms. Obtain the version actually offered.

A fictional scope comparison

An importer receives one proposal describing port-to-port carriage and another describing protection from a named warehouse to a named receiving point. The wording alone does not establish complete end-to-end protection in the second offer.

Check start/end definitions, stops, mode changes and exclusions. Record an uncovered inland leg in the first proposal if confirmed. Record a separate storage-notification condition in the second if applicable.

This example calculates no claim payment. Without contract wording, event facts and governing law, a figure would imply unjustified certainty.

Connect sale terms with protection

Incoterms allocate risks between seller and buyer, among other obligations. They do not themselves establish that suitable insurance was actually concluded for the party bearing a particular leg's risk.

If a trading partner arranges insurance, obtain the document and verify scope, beneficiary and claims process. “Insurance included” starts the check; it does not finish it.

Have contacts before a problem

Record where to notify the insurer and where to raise a claim against the carrier. These can be separate notices with different requirements. Verify deadlines under the actual contract and law; do not wait for the final loss valuation before checking the procedure.

Please confirm whether [offer] is cargo insurance or an extension of liability. Provide complete terms and identify the entitled party, route and storage scope, sum and limits, deductible, exclusions relevant to [cargo], change-notification duties and claims procedure. Describe any gaps requiring additional agreement separately.