The transit and shipping sector has turned upside down by the catastrophe of Covid-19. The travel and transit industry around the world has been struggling to handle the impacts of the pandemic. Confused with changing policies on a quotidian basis, insurance companies are recording an influx of questions and inquiries regarding the movement of their belongings.
Transportation of merchandise often leaves the belongings exposed to various potential problems, and it is important to fortify the goods from potential abuse in the future. One of the biggest freight shipping concerns is what will happen if the shipment gets damaged or lost. How are the items protected? What impact will it have on the business and customers?
Table Of Contents
What is Carrier Liability insurance?
A carrier liability insurance can help alleviate the risks and charges arising from the damage or loss of a customer’s property. It provides coverage for the damage to the customer’s cargo during transportation. Carriers are liable for all the vandalism, harm, delay, and loss of cargo of the customer from the point of pickup till the delivery. Also known as Goods in Transit insurance, it covers the transport operator’s liabilities against the client contacts and consignment notes for lost or damaged commodities.
When a shipment or item is damaged or lost within the transit process, the cargo owner needs to file a formal application claiming reimbursement from the freight operator. However, to receive carrier liability insurance assistance, the operator must hold sufficient documents that support the cargo owner’s request.
Who needs carrier liability insurance?
From freight operators, carriers to warehousing companies, need a carrier’s liability insurance. Without valid and adequate insurance protection, forwarding agents or anyone involved in the process of cargo transportation is liable for the damage and loss of the customer’s goods, even for secondary factors (lightning, flood, etc.)causing damage to the cargo during their service. Whether you operate a supply chain logistics of cargo internationally or a small fleet or owner-driver, the right carrier liability insurance can help manage your risk.
What does a carrier liability insurance cover?
Categorically, a carrier liability insurance provides coverage in three sections:
Legal liability as Principal carriers: If the carrier approves the terms and conditions of this consignment or contact, the coverage is provided for delay or mis-delivery.
Legal Liability for the Subcontractor: Under this provision of the insurance, the subcontractor’s liabilities to compensation for damaged or lost customer commodities are protected and covered.
Carrier’s Compensation Cover: Under this consignment, all the goods, merchandise, or cargo of the customer under your care, according to your contractual agreement between the freight carrier and the customer, are covered.
Exclusions and Limitations
The insurance cannot compensate for some circumstances that cause damage or loss to the customer’s cargo. These situations are outlined in the laws and international agreements, such as natural disasters or acts of war.
Suppose the freight operator or carrier is responsible for the damage of cargo. In that case, the international treaties and regulations by the domestic and international governing bodies decide how much payment has to be incurred. These regulations and liabilities protect the carriers and operators from going out of business or heavy losses.