Freight forwarder and carrier liability insurance - Insurance

Freight Forwarder and Carrier Liability Insurance

The bulk of cargo transportation is carried out with the help of freight forwarding companies. In Table. 8.15 shows the main functions of freight forwarders. These companies are not carriers, but provide the process of transporting goods.

Table 8.15. Primary and Additional Functions of Forwarding Companies

Forwarder functions

Main - the conclusion of contracts for the carriage of goods in which the freight forwarder acts as a consignor either on his own behalf or on behalf of the cargo owner

Related: consultations on choosing a transport route; stevedoring; repacking, re-marking and completion of loading consignments in accordance with maritime customs; cargo tracking and security; logistical services; cargo storage operations; Assistance in documenting and customs clearance; organization of transport insurance

In practice, one-time forwarding orders are used to execute one or several services (with the obligatory acceptance of the order by the freight forwarder) and long-term contracts for the organization of freight forwarding services. The most common forwarding orders are issued: 1) for the organization of transportation at the expense of the client, but on behalf of the freight forwarder; 2) for the conclusion of a charter contract; 3) leasing and sublease of additional vessels; 4) to pay freight, ship, lighthouse and other charges; 5) for the organization of stevedore and Tallman operations (tracking the acceptance of cargo). A long-term contract is usually drawn up in the standard form recommended by the national freight forwarding association.

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The responsibility of freight forwarders for the performance of their duties is subject to insurance in the framework of civil liability insurance. The insurance interest of freight forwarders derives from their functions in organizing the freight transportation process and the financial terms of the contract for freight forwarding.

Carrier is a transport enterprise that issues a shipping document and carries out the transportation of goods and/or passengers. The object of insurance of civil liability of the carrier is his property interests related to the duty of the carrier in the manner established by civil law to compensate for damage caused to him by third parties in connection with the use of the means of transport by the carrier. Transportation can be carried out by road, rail, water and other modes of transport.

Causing property damage to the cargo owner due to loss, damage or loss of cargo during transportation, as a rule, is an insured event under the contract of insurance of civil liability of the carrier.

The limit of liability of the insurer (the maximum amount of payment of insurance compensation) may be determined by agreement of the parties on the basis of an expert assessment of the possible amount of the liability of the insured, and also on the basis of the limit of liability for damage caused by law or international agreement. The insurance contract should specify the limits of liability for each type of liability insured. The contract establishes a franchise, including insurance for liability for the safety of cargo. The amount of insurance compensation may include:

- the costs of compensation for the harm caused in accordance with the decision of the court or by mutual agreement between the insurer, the insured and the victim;

- the costs of the insured to reduce the amount of losses;

- expenses incurred with the written consent of the insurer for the purpose of preliminary clarification of the circumstances and causes of the insured event;

- the legal costs of the insured.

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