International freight transport is a crucial sector for the global economy; however, it presents numerous risks. Losses, damages, and delays can cause significant costs for both the shippers and the recipients of the goods. For this reason, there are various insurance solutions, including carrier liability insurance and the coverage provided by the CMR Convention for road transport.
In particular, in this article, we will explore the characteristics of these policies, their costs, and the differences between the various forms of protection.
So, if you want to ship with peace of mind, keep reading: the answers you are looking for are here!
Carrier liability insurance: the main things to know
When a company entrusts the shipment of its goods to a carrier, the latter assumes a very specific responsibility: ensuring that the cargo arrives at its destination in perfect condition. However, road transport is subject to multiple risks, such as accidents, theft, or damage due to unforeseen events. Consequently, the law requires the carrier to take out a specific insurance policy, known as carrier liability insurance.
This policy represents a security guarantee for the transported goods and adequate protection for both the carrier and its customers. In other words, its main function is to cover any damages that may occur during transport. But what are its main features? Let’s examine them in detail.
What is carrier liability cnsurance?
Carrier liability insurance is a mandatory civil liability policy for carriers transporting goods on behalf of third parties. Specifically, its purpose is to protect the carrier from potential compensation claims in case the goods suffer damage, loss, or other issues during transit.
What does carrier liability insurance cover?
Carrier liability insurance generally covers:
- Damage or loss of transported goods
- Theft during transit
- Accidents or extraordinary events (for example, fires, rollovers, etc.)
- Delivery delays, although these must be caused by events covered by the policy
However, there may be limitations or exclusions depending on the insurance company and contractual conditions.
What are the carrier’s obligations in transport?
The carrier is responsible for ensuring that the goods entrusted to them are transported safely and delivered to the recipient within the agreed timeframe. Additionally, they must strictly follow the instructions provided by the sender, ensuring that all procedures are respected. For example, one of the fundamental obligations includes the proper management of transport documentation, such as the waybill, which certifies the shipment details.
How much does carrier liability insurance cost?
The cost of carrier liability insurance can vary based on several factors. For example, these include the type of goods transported, their value, the distance traveled, and the level of coverage chosen. In general, the insurance premium can range from a few hundred to several thousand euros per year, depending on the specific needs of the transport company.
How much does carrier liability insurance reimburse?
The maximum amount reimbursable under carrier liability insurance is regulated by current legislation. In domestic transport, the compensation is usually around 1 euro per kilogram of gross weight of the lost or damaged goods. Similarly, for international transport, the limits set by the CMR Convention apply.
What is the difference between carrier liability insurance and “per account” insurance?
The difference between carrier liability insurance and “per account” insurance lies in their purpose. Instead of covering the full value of the goods, carrier liability insurance, which is mandatory for transporters, only covers the carrier’s civil liability concerning the transported goods.
On the other hand, “per account” insurance is taken out directly by the owner of the goods and provides broader protection, covering the total value of the cargo without the limitations imposed by carrier liability insurance.
The CMR convention for international road transport
In international road freight transport, besides carrier liability insurance, it is equally important to consider the CMR Convention. This is an international treaty that regulates the transportation of goods between different countries and establishes the carrier’s responsibilities in case of damage or loss of goods. In other words, this convention aims to standardize regulations at an international level, providing a clear legal framework for both carriers and cargo owners.
In particular, the CMR Convention defines various aspects of transport, including the required documentation and the procedures for handling disputes. Understanding its rules is essential for those working in the industry, as it provides important legal guarantees and protections in case of issues during shipment.
What are the rules of the CMR convention?
The CMR Convention establishes that a CMR waybill must be issued for every international road transport. This essential document certifies the transport conditions of the goods. Additionally, it regulates the carrier’s liability limits and specifies the circumstances under which the carrier can be held responsible for any damage to the goods.
For instance, in cases of loss or damage to the goods during transport, the carrier may be required to compensate for the damage, but only within the limits set by the convention. For this reason, it is crucial to understand the specific conditions established by this treaty.
How is a CMR waybill issued?
The CMR waybill is a transport document issued in three copies, which must be signed by the sender, the carrier, and the recipient. It must also contain detailed information about the transport, including:
- Sender’s and recipient’s details
- Description of the goods
- Weight and volume of the cargo
- Date and place of departure and arrival
Therefore, its correct completion is essential to ensure shipment traceability and protect all parties involved.
Who issues it?
The preparation of the CMR document is primarily the responsibility of the sender, although it is often completed with the assistance of the freight forwarder and the carrier. In fact, it is a crucial document, as it certifies the agreement between the parties involved in the shipment and serves as a guarantee for both the sender and the recipient.
When is it not required?
The CMR waybill is not required for domestic transport or when transport takes place entirely within a single country without crossing borders. In such cases, national transport documents are used, which still provide shipment traceability.
However, it is always important to check current regulations, as some countries may require specific documents even for domestic transport.
What is CMR insurance?
CMR insurance is a specific policy for international road transport, covering the carrier’s liability for the transported goods. With this policy, it is possible to obtain compensation in case of loss or damage to the goods, within the limits set by the CMR Convention.
Therefore, it is an essential protection for those operating in the road transport sector and seeking to reduce the risks associated with this activity.
What does it cover?
CMR insurance covers:
- Damage or loss of goods during international transport
- Carrier’s liability within the limits of the CMR Convention
- Legal costs for disputes related to transport
However, certain exclusions may apply, such as force majeure events or shipper negligence. For this reason, it is essential to carefully review the policy terms before purchasing it.
Finally, understanding regulations and insurance policies in international transport is essential to protect goods and ensure efficient risk management in logistics.
The CARGO insurance policy: a must-have for total peace of mind
In the context of international transport, companies face multiple risks that can compromise the safety of their goods. For this reason, in addition to the coverage provided by carrier liability insurance and the CMR Convention, there is an insurance solution that offers even broader protection: Cargo insurance.
Specifically, this type of insurance is designed to ensure full compensation in the event of damage, theft, or other unforeseen events that may compromise the goods during transit. Thanks to its flexibility, it is considered one of the most reliable and versatile types of coverage. Consequently, Cargo insurance has now become a must-have for all businesses looking to engage in international trade with greater peace of mind.
Why should a company consider “Cargo” insurance for its shipments?
Goods in transit are exposed to numerous risks, such as physical damage, theft, or loss, which can result in significant financial losses. Although logistics service providers implement measures to ensure shipment security, unpredictable factors can still compromise the integrity of the goods.
Furthermore, the lack of transparency in the risk assessment models used by providers makes it difficult for companies to estimate the effectiveness of existing protective measures. As a result, Cargo insurance serves as an effective solution, providing financial coverage for any adverse events that may occur during transport.
What are the features of “Cargo” insurance for freight transport?
Cargo insurance is a policy that covers losses and damages to transported goods, regardless of the mode of transport used—whether by land, sea, or air.
Additionally, this coverage extends to a wide range of risks, including accidents, natural disasters, and other unforeseen events that could compromise the integrity of the goods. To be more specific, the policy can be customized based on the company’s specific needs, taking into account the nature of the transported goods, the routes taken, and other relevant factors.
In conclusion, relying on experienced consultants, such as CTI, helps businesses identify the most suitable coverage and manage international transport risks more effectively.
So don’t hesitate to contact us for a personalized consultation!
