A transport company having insurance does not necessarily mean the owner of the goods has adequate protection.

Carrier liability insurance and Marine Cargo Insurance address different exposures.

What does a carrier’s insurance protect? #

A carrier may hold insurance for its own legal liability arising from loss or damage to customers’ goods.

This means the carrier’s policy can depend on the carrier actually being legally liable.

The carrier may also have:

• Contractual exclusions.
• Liability limits.
• Conditions of carriage.
• Defences available to it.

How is Marine Cargo Insurance different? #

Marine Cargo Insurance is arranged to protect the insured’s financial interest in the goods themselves.

Subject to the cargo policy, the insured may therefore be able to claim for covered loss or damage without first having to establish that the carrier was legally liable.

Can the cargo insurer recover from the carrier? #

Potentially.

After paying an insured claim, the cargo insurer may have rights of recovery against the carrier or another responsible party.

This is one reason why businesses should preserve their rights against carriers following a loss.

Should I still check the carrier’s insurance? #

Yes.

Carrier arrangements remain important, but they should not automatically be treated as a substitute for insuring the goods.

Businesses moving valuable stock, machinery or equipment should consider the financial exposure if the carrier is not liable or its liability is limited.