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Carrier's Liability vs. Marine Cargo Insurance
Carrier's Liability:
- Who it Protects: Protects the carrier (transport company - shipping line, airline, trucking company) from financial liability for loss or damage to cargo under their care, custody, or control.
- Coverage: The extent of coverage can vary depending on the specific policy and the mode of transport (road, air, sea). It may cover situations like:
- Accidental damage during transportation
- Theft of cargo
- Fire or other perils causing damage
- Limits of Liability: Carriers typically have limitations on their liability per kilogram or per package. This means they may not cover the full value of the cargo if it's lost or damaged.
- Who Pays: The carrier pays the premium for this insurance.
Marine Cargo Insurance:
- Who it Protects: Protects the cargo owner (exporter, importer) from financial losses due to damage or loss of their cargo during transportation.
- Coverage: Marine cargo insurance offers a wider range of coverage options compared to carrier's liability. It can cover:
- Loss or damage from various perils like fire, theft, weather events, collisions, etc.
- Spoilage of perishable goods
- War and civil unrest (depending on the policy)
Adam Pile
- Level of Coverage: The cargo owner can choose the level of coverage they need, impacting the premium cost.
- Who Pays: The cargo owner pays the premium for this insurance.
Here's an analogy to understand the difference:
- Carrier's liability protects the carrier from limited liability if they damage or lose cargo.
- Marine cargo insurance protects the cargo owner from a wider range of risks associated with their goods during transportation.
Important Note:
- Both carriers and cargo owners need to understand their respective insurance coverage and any potential gaps. In some situations, both types of insurance might be necessary for comprehensive protection.
All information above has been provided by the author.
Adam Pile, Insurance HQ Pty Ltd, ABN 33606759228, AFSL 363610
This article originally appeared on Truck Insurance HQ and has been published here with permission.