Those who rely on carriers’ trading conditions may not realise just how restrictive those conditions can be in terms of the circumstances in which the carrier has to pay for loss or damage, and how little the carrier might actually pay in compensation.
The below questions aim to highlight some of the potential problems and to demonstrate the benefits of buyers and sellers arranging insurance cover and why you shouldn’t rely on your freight forwarder providing cover for your goods.
Did you know that if the carrier isn’t directly responsible for the loss of or damage to your goods, he might not have to pay for that loss or damage?
Trading conditions and international conventions on the carriage of goods by sea, road, rail or air typically give carriers defences where loss or damage is due to, for example: Act of God, War, Strikes, riots and civil commotions, Terrorism or circumstances beyond their control.
Did you know that, even if the carrier does have a liability, the legal position or their trading conditions may allow them to limit the amount that they pay in compensation to a fairly modest monetary amount?
In the UK, hauliers typically limit their liability to GBP 1.30 per kilogram of goods lost or damaged. For international carriage by road, the figure is about GBP 9.00 per kilo.
For many goods, this will represent only a small fraction of their value – for example a laptop computer only weighs about three kilos.
Do you realise that the carrier with whom you contract may not be the one who actually carries the goods, and so your claim could be against a party that does not view you as their customer?
You will always know and have a relationship with your own cargo insurer.
Have you considered what you would do if the carrier was not insured or if his action or inaction in causing your loss or damage meant that he was uninsured because he was in breach of a policy condition or warranty?
Pursuing a carrier through the counts for a small sum will be disproportionately time-consuming and costly.
If a carrier doesn’t have the assets to meet your claim – particularly a large one – then you will be left high and dry.
In partnership with A&B Insurance, Greater Manchester Chamber of Commerce provides its members with preferential rates on secure, instant and high-quality cargo insurance. Find out more and get a quote directly here.