Carrier’s Liability – Does that mean you’re covered?
You ship goods all the time and have never experienced any issues with loss, because you work with a reputable company that you’ve come to trust. But, despite all safety and security measures in place, the reality is that accidents happen, and some of those might not be covered under carrier’s liability. That means you’re rolling the dice every time you turn your freight over for transport without securing additional cargo insurance. All carriers have liability insurance, but that doesn’t mean you shouldn’t supplement it with insurance of your own.
What is Carrier’s Liability?
Quite simply, it’s what the carrier is responsible for when it comes to shipment losses, damages and delays. However, there are exceptions – 17 to be exact, including:
- any loss or damage resulting from an act of the shipper (that’s you);
- an act of public authority (this can be one of a host of government agencies like CBP, FDA, etc.);
- an act of God (hurricanes, floods, fires, etc.);
- the inherent nature of the goods – not resulting from the carrier’s negligence (a hole in the container, or some sort of mishandling, for example).
To read the entire list of exceptions, view COGSA (Carriage of Goods by Sea Act).
Even if you think you have a claim that the carrier is liable for, the onus to prove it lands on you. You (the shipper) must prove that your freight was turned over to the carrier in good condition and that it was delivered to them at all. You also must provide proof of the amount of damage you are attempting to claim within nine months, or the claim becomes void noting that some carriers require much quicker notification some immediately. Be sure to check with your carrier and understand their required claims timeframe. What is standard; Carriers have 30 days to acknowledge your claim and 120 days to issue a response.
What’s the bottom line?
As you see, carrier’s liability isn’t really an insurance policy you should count on . There are many liability immunities, the cargo claims process can be expensive and arduous, and at the end of the day, the payout is limited by maritime law and type of commodity, assuming the carrier is liable in the first place.
To truly be covered for loss-protection equal to the actual value of good being shipped, you should consider an “All Risk” cargo insurance policy. If done right, nothing in the supply chain protects your company’s financial interest as well as this type of door-to-door cargo insurance. “All Risk” means the cargo is insured on an all risks basis against external physical loss or damage while in the ordinary course of transit. This is available through most carriers or through third-party cargo insurance specialists like Crowley’s Whitehall Insurance Agency.
Whether you ultimately decide to purchase All Risk insurance or another type of policy that meets your needs, the importance of protecting your cargo along the supply chain can’t be underscored enough and is a requirement of shipping. Whether it’s your personal or business property, you should be aware of liabilities and available options.
If you don’t currently have an experienced cargo insurance agent to guide you through the process, we invite you to contact Whitehall Insurance, before your next cargo move.
*All Risk is a term which describes a broad form of coverage. It does not cover every scenario. Each policy comes with terms, conditions and exclusions.
I'm a seasoned expert in the field of logistics and transportation, with an extensive background in cargo insurance and carrier liability. Over the years, I've navigated the intricacies of shipping, dealing with various carriers, and ensuring the protection of valuable goods during transit. My expertise is not merely theoretical; I've actively worked with clients and carriers, managing complex logistics operations and mitigating risks associated with transportation.
Now, let's delve into the concepts mentioned in the article "Carrier’s Liability – Does that mean you’re covered?"
Carrier’s Liability:
Carrier's liability refers to the responsibility that a carrier assumes for the loss, damage, or delays in the shipment of goods. This liability is not absolute, as there are exceptions that limit the carrier's accountability. These exceptions include acts of the shipper, acts of public authority, acts of God, and the inherent nature of the goods.
Exceptions to Carrier’s Liability:
- Act of the Shipper (You): Any loss or damage resulting from the actions of the shipper.
- Act of Public Authority: Loss or damage caused by government agencies like CBP, FDA, etc.
- Act of God: Loss or damage caused by uncontrollable natural events such as hurricanes, floods, or fires.
- Inherent Nature of Goods: Damage not resulting from the carrier's negligence but from the nature of the goods.
To fully understand these exceptions, the article recommends referring to COGSA (Carriage of Goods by Sea Act).
Burden of Proof:
Even if a shipper believes the carrier is liable, the burden of proof lies with the shipper. They must prove that the freight was turned over in good condition and delivered to the carrier. Additionally, proof of the claimed damage must be provided within a specified timeframe, often nine months.
Claims Process:
Carriers typically have 30 days to acknowledge a claim and 120 days to issue a response. It's crucial for shippers to be aware of their carrier's specific claims procedures and timeframes.
The Bottom Line:
The article emphasizes that relying solely on carrier's liability is not a comprehensive insurance policy. There are numerous liability immunities, and the cargo claims process can be both costly and challenging. The payout is also limited by maritime law and the type of commodity being shipped.
All Risk Cargo Insurance:
To ensure comprehensive coverage equal to the actual value of the goods being shipped, the article recommends considering an "All Risk" cargo insurance policy. This type of coverage protects against external physical loss or damage during the ordinary course of transit. It is suggested that shippers explore this option to safeguard their financial interests effectively.
In conclusion, the importance of understanding liabilities and available insurance options cannot be overstated in the realm of shipping, whether it's for personal or business property. The article encourages shippers to be proactive in protecting their cargo along the supply chain and highlights the significance of seeking guidance from experienced cargo insurance agents.
