Group Health Insurance

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There are multiple options of add-on cover available which can be added to the freight forwarders liability policy by paying an additional premium amount. The freight forwarders insurance policy covers liability of freight forwarder in case of damage to goods in transit and also covers contingent cargo. Various other kinds of risk are mitigated by including following extensions in the freight forwarders insurance policy.

1. Professional indemnity insurance: Any negligent act of the freight forwarder or breach of contract is covered under professional indemnity insurance cover. Error or omission committed by your sub-contractor, employees or agents are also covered under professional indemnity coverage.
For example, The consignment of goods has to be delivered as per cash on delivery basis. At the time of delivery, freight forwarder released the goods without collecting the cash and that too in the absence of required documents i.e. bill of lading. Later the consignee disagreed to make any payment against the consignment and there was no proof of delivery of goods which resulted in financial loss for the consignor and later he sued the freight forwarder for his negligent act. If freight forwarder has professional indemnity insurance then such claim will be covered under the policy and defence cost will be borne by the insurer.

Read: Is it important for a freight forwarder to insure consignment of its clients?

2. Third party liability insurance: Any bodily injury or third party property damage arising out of the operations of insured is covered under third party liability cover. Legal liability or claims arising from an accident while performing the services will be covered under this policy. The consequential loss suffered by the third party is also covered. The insured should take all the possible measures to avoid the loss or damage.
For example: At the time of unloading of consignment, one of your employees unintentionally damaged some cargo because of an accident, a slip or a fall which also caused injury to the third party. In such case, the claim will be covered against third-party liability if this extension is included in the policy.

3. Loss of documents extension: Loss of documents in transit or in custody of the insured are covered under loss of document extension. All the cost and expenses incurred by the insured in order to restore or recover the lost document will be borne by the insurance company. This extension is important for expensive shipments as the customs duty or the bills imposed on a consignment during an export or import assume a hefty cost and if lost, a freight forwarder or the consignor have to bear the cost of fines or penalties.

4. Fines and duties liability insurance: This insurance will cover unintentional breach of any regulation which resulted in fines or penalty imposed by an authority on freight forwarder during a transit. Freight tariffs are not covered under this cover. A freight forwarder should abide by the compliance required to carry out the trade.
Different insurance companies have a different set of add-on covers. One needs to study the policy wordings and check with the insurer about the coverage and identify which add-on cover is essential as per their business operations. The magnitude of risk plays the key role in identifying the requirement of add-on coverage. As a freight forwarder, one should always buy freight forwarders liability insurance and include additional coverage for complete risk mitigation.

Also Read: What are the liabilities of the freight forwarder and how it can be covered?

Case Study:
JL Logistics limited signed a contract of delivering the container of olive oil from Dubai to India. The container was not properly sealed and checked at the time of loading, but when the container arrived in India, it was weighed and found light which alarmed the consignee about the leakage. The consignor filed a case against the freight forwarder for the loss. A freight forwarder is held responsible for his negligence. Such case is covered under freight forwarder insurance policy only if error and omission cover would have included in the policy but it was not included while buying the policy, hence resulting in claim rejection.
It is important to include extensions which are highly required in your business operations and as a freight forwarder, it is important to include professional indemnity insurance coverage, third party liability cover in freight forwarders liability insurance policy.