Carrier Liability

Protect your interests with all-risk coverage

International shipments that are not properly insured may expose your business to countless financial risks. Recovering cargo losses from carriers can prove difficult since carriers have limited liability—even on declared value shipments.

To recover a loss from a carrier, you must prove three things: what caused the loss, that the loss occurred while the cargo was in the carrier’s possession, and that the carrier directly caused the loss. This is especially challenging for global shipments when considering how many carriers encounter your cargo during transit.

Avoid questions of liability with all-risk insurance coverage.

Examples of limitations of carrier liability

International ocean shipments
  • $500 per shipping unit (Carriage of Goods by Sea Act (COGSA))—to/from U.S. borders
  • 2 SDRs per kilo or 666.67 SDRs per pkg., whichever is less (Hague/Hague-Visby)—to/from non-U.S. borders
International air shipments

22 SDRs per kilo (approx. $30–$32 per kilo)—Warsaw/Montreal Protocol Convention

Full truckloads—U.S.

Maximum $100K

Less than truckloads—U.S.

$0.50 per lb. (or per carrier rate/tariff class)

Over the road transit—Europe

8.33 SDRs per kilo (CMR rules)

Stop relying on Incoterms® for insurance placement

Incoterms® typically only focus on a point in time when responsibilities and liabilities pass between a seller and a buyer, and this includes insurance. Keep in mind there can be conflicts between the terms of sales and the terms of payment, or other financial risks that leave you exposed to unrecoverable costs. Here are some examples:

Importer buying under CIF terms

  • Seller controls insurance and is only obligated to obtain minimal coverage.
  • Insurance may cease at delivery port, leaving buyer exposed when goods move from port to final delivery door.
  • Only the commercial value and freight/handling charges that are paid by the seller are covered by the seller’s secured insurance, leaving the buyer exposed with uncovered charges they pay, including U.S. duties and taxes.
  • Claims are handled overseas.

Exporter selling under EXW, FOB/FAS/FCA terms

When credit terms are extended, the seller carries the financial risk until they are paid. This results in several unanswered questions, including:

  • What happens if the shipment is lost or damaged?
  • How will the seller protect themselves?
  • Who will guarantee the invoice will be satisfied?

What is included in marine cargo insurance?

See our policy details or speak with our experts to find out if this is the right fit for your needs.

Connect with an expert Review coverage summary

Incoterms® is a registered trademark of the International Chamber of Commerce (ICC).

Coverage is arranged through an open cargo policy. The information contained above is not a complete representation of all the policy provisions. For a complete copy of the policy terms, please contact your C.H. Robinson representative.