Forwarder's liability insurance - what does it involve and what does it protect against?

Update date:
11 Jun 2024
Date of publication:
11 Jun 2024
Reading time: 2 minutes
Freight Forwarder's Liability

Table of contents:

Freight Forwarder's Liability Insurance is an insurance policy that a freight forwarding company takes out from an insurer. It insures the company against damage incurred in the performance of the forwarding service. The following provides an overview of what Freight Forwarder's Liability protects against. 

What does the Freight Forwarder's Third Party Liability cover?

Freight forwarder's third-party liability protects against many of the potential risks associated with freight forwarding activities. This includes, among others, liability for damage to shipments, errors in documentation or negligence during the organisation of transport. In the case of the aforementioned activities, freight forwarder's third party liability provides protection against potential claims related to:

  1. Sending and receiving parcels,
  2. Development of dispatch instructions,
  3. Advice on transport, choice of means of transport, transport route and organisation of transport,
  4. Preparing consignments for transport, including packing, labelling, loading, handling, etc,
  5. Organising loading, handling, transport and escort activities,
  6. Concluding contracts of carriage and other contracts related to the movement of consignments,
  7. Issuing instructions to the carrier,
  8. Preparation of transport documents,
  9. Transmission of shipping documents in accordance with the forwarding order,
  10. Submitting shipments for insurance,
  11. Storage of consignments in accordance with regulations and standards before, during and after transport,
  12. Controlling the status of shipments,
  13. Declaring consignments for customs clearance (excluding responsibility for customs agency activities),
  14. To carry out other forwarding activities not covered above if they are necessary for the proper performance of the forwarding contract.

 How much does freight forwarder's third party insurance cost?

Freight forwarder's liability insurance is taken out for a given sum insured, which can range from EUR 100,000 to several million. The premium will vary depending on the insurance company. The lowest rates for the smallest guaranteed sum will be around 800-1000 PLN. As the sum increases, the rates may even reach several thousand PLN.   

How do I get compensation under my policy from my insurer?

The best way to receive compensation is to contact a company with a Freight Forwarder's Liability policy. This company will be responsible for reporting the damage to the relevant insurer and handling further formalities for the payment of compensation.

Freight Forwarder's Liability Insurance vs. CARGO Insurance

If CARGO insurance is taken out for the transport of the goods, the forwarder's third-party liability policy is no longer relevant. It is the CARGO insurance of the goods that will be used for reporting damage. It is therefore advisable to request additional CARGO insurance for each import or export. In the event of any damage, it will be easier to obtain compensation from it. 

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