Cargo Insurance or Carriers Cargo Liability Insurance?
Cargo insurance assures the goods being transported. Cargo insurance is usually taken by the party, which has, according to agreement, the risk of goods damaging during transportation including intermediate storage. When defining responsibilities in the trade agreement, well-established terms of delivery (for example, Incoterms 2010 or Finnterms 2001) are usually used. Cargo insurance is also used in transportations, where seller has the insurance obligation according to the delivery terms (CIF and CIP).
Carriers cargo liability insurance covers responsibility of the carrier, forwarding agents or the like for the goods being transported or handled.
Carrier has the responsibility for the possession of the goods entrusted. Carrier’s liability is regulated by national and international laws and agreements (conventions) in the various modes of transportation.
Cargo insurance and Carriers cargo liability insurance are not overlapping insurances.
Liability of the carrier is always limited and in many situations it may happen that the owner of the goods will not get compensation for damage or will be paid only partly of the value of the damage.