Cargo insurance & carrier liability

01 / PRACTICAL GUIDANCE

A freight booking is not cargo insurance

Paying a carrier to move goods does not automatically insure their full value. Carrier or forwarder liability depends on the contract, applicable law, the party’s role and the circumstances of the loss. It may be limited and may require you to establish responsibility.

Cargo insurance is a separate policy covering specified interests and risks, subject to its wording. It can address a gap between the value at risk and recoverable transport liability, but it is not a promise that every loss will be paid. Ask for confirmation of cover before the insured transit begins.

A product described as extended liability or cargo protection is not necessarily insurance. Compare the actual terms, provider, coverage triggers and claims process.

02 / PRACTICAL GUIDANCE

Which terms actually apply?

• Air waybill: identifies the air carriage and incorporates conditions. International treaty rules may apply depending on the carriage.
• Ocean bill of lading: check the contracting carrier, routing and liability clauses together with mandatory law. Limits may be linked to packages or weight.
• Forwarding conditions: identify whether the forwarder acts as agent or contractual carrier and which conditions are incorporated.

FIATA Model Rules are a framework for forwarding conditions; they are not a universal insurance policy or a liability rule automatically governing every shipment. A FIATA transport document and a company’s trading conditions also need to be read in their own context. Do not assume Proconnect or another provider has adopted a particular set of terms without checking the contract.

03 / PRACTICAL GUIDANCE

Why the liability limit matters

Standard liability limits are defined under the applicable convention or transport conditions. They are ceilings where liability exists, not automatic compensation or full-value cargo insurance. SDR (Special Drawing Right) is an international accounting unit whose currency value changes.

The FIATA FBL provides a separate 8.33 SDR/kg baseline when the contracted transport excludes sea and inland waterways. Its stage-specific and mandatory-law provisions can change the applicable limit. A house bill of lading is not automatically a FIATA FBL: check the document issued and its conditions.

Package descriptions matter, especially for containerised cargo. Other ocean regimes, declared-value arrangements and mandatory law may produce different limits. A commercial invoice stating the goods’ value does not by itself increase liability. These are general reference limits, not a statement that Proconnect has adopted a particular contract.

04 / PRACTICAL GUIDANCE

What to check in the policy

• The insured party, goods, valuation basis and currency.
• Where cover starts and ends, including inland legs, temporary storage and transshipment.
• Covered risks, exclusions, deductible and any special packing or security conditions.
• Whether used goods, temperature variation, theft, war or strikes need specific agreement.
• Claims contacts, survey instructions and notification requirements.

“All risks” remains subject to exclusions. Delay, inadequate packing or the nature of the goods may be excluded under the wording. Do not assume consequential loss or lost sales are covered. Ask about general-average and salvage provisions for ocean transit as well.

05 / PRACTICAL GUIDANCE

Make the decision before cargo moves

Consider the financial effect of losing the shipment, not only how often you expect a loss. High-value, fragile, moisture-sensitive or business-critical goods deserve a specific discussion. Strong packing and good handling remain necessary even when insurance is arranged.

Send the commodity, value, packing, route, dates and any unusual handling requirements. Ask for the policy or certificate and written confirmation that the requested cover is in place. A request for a quotation does not bind insurance. If an incident happens, notify the insurer and transport parties promptly and preserve the evidence.