Many merchants do not know that in the event of theft, loss or damage to their cargo then the legal liability of the carrier is restricted by law. It is our experience that these customers then try to hold back the freight payment or to try to claim the full value of the loss from the forwarder.
The liability of carriers and transport intermediaries are different in almost every country: you need a solution that meets or exceeds local requirements.
Hague Visby Rules
Carriage of Goods By Sea Act (COGSA)
To quickly demonstrate the complexity of ship-owners liability we can briefly look at the COGSA: COGSA This Act limits the liability of the ship owners to USD 500 per package. Based on these regulations ship-owners began to argue that containers were single “packages” and that they could thus limit their liability to $500 per container. This led to much litigation and the rest of the world, seeing this as an attempt by ship-owners to free themselves from responsibility, then amended the Hague Rules in 1968 with the Visby Amendments.
These eliminated the “per package” limitation and substituted it with a per kilogram limitation. In so doing, litigation concerning limitations on liability became virtually non-existent outside of the United States, however the US Congress failed to ratify the Visby Amendments to the Hague Rules.
In China for example there is no compulsory liability insurance by law which covers the cargo against damage or theft during transit.
Marine Cargo Insurance is a property insurance and covers the theft or damage to your cargo, irrespective of the legal limits or liability of carriers, forwarders or other transport intermediaries.
Should you be a transport intermediary your customers might not know about the above facts and expect you to inform them about these risks before their cargo is transported. We advise you to offer our marine cargo insurance to your customers, and let them decide how they protect themselves from loss.