Freight Forwarders Insurance Policy

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Types of Risk faced by Freight Forwarders

Cargo Damage

Legal liability arising from cargo damage during the transit, any consequential loss faced by clients due to late delivery or physical damage of goods are some of the major risk exposures faced by a freight forwarders.

Negligent Acts

Any loss incurred by clients due to negligent acts performed by freight forwarders, their agents or subcontractors invites error and omission claims. Freight forwarders are held liable to compensate for such losses.

Third Party Lawsuits

Legal liability claims may arise due to physical damage to third party’s property, bodily injury or legally recoverable consequential loss arising out of the operations of the freight forwarders.

Fines and Duty

A freight forwarder may be liable for breach of regulations or statutory non-compliance. Legal liabilities to the authorities like customs or port authorities are a threat for freight forwarders.

Cover Relevant for Freight Forwarders

Liability Cover

Freight Forwarders Liability Insurance covers legal liabilities arising due to cargo damage or consequential losses due to late delivery. Coverage of all modes of transport under one sum insured is provided. Freight liability policy triggers claims in which the carrier or freight forwarder is at fault.
Coverage of legal liabilities to the authorities like Customs, Port Authorities for any breach of regulations is provided for.
Claims arising from errors and omissions and third party liability claims can also be covered.

Cargo Cover

Cargo Insurance provides all-risk protection against cargo damage. It covers all types of cargo against various risk exposures such as fire, lightning, collision of vessels with external objects.
Cargo Cover provides peace of mind and sense of security to your client and it builds your credibility in the market as well.
Add value to your freight forwarders business by arranging cargo insurance for your clients.

Add-on Cover

Warehouseman’s Legal Liability extension provides specialized coverage for cargo liability of an operator of a public commercial storage or distribution warehouse.
Factory and Warehouse Insurance protects your business premises from fire, explosion and other natural perils.
Protect your employees from any casualty under the Workmen Compensation Act, 1923 and Fatal Accident Act, 1855.

Frequently Asked Questions

Freight forwarder cargo insurance policy covers legal and contractual liability made against the business due to damage to cargo, errors and omissions, liability towards third party and uncollected cargo costs. It also covers physical loss of or damage to buildings and premises, liabilities, costs and expenses imposed by governmental or Judicial Authorities and Fines, duties and penalties. Freight forwarders cargo insurance includes sea freight insurance and international freight insurance.

The common exclusions under the freight forwarders liability are war, terrorism, packaging & hook losses, negligence of consignor, financial default or insolvency, willful misconduct, ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear, inadequate packing and insolvency. These can be insured at a fee. In order to get complete coverage do not violate the policy terms.

The biggest advantage of freight liability insurance policy is that a single policy can cover many risks under one policy. You can include third party liability cover in your freight forwarders insurance policy by paying an additional premium and cover the bodily injury or physical loss or damage to the property. SecureNow will help you design a comprehensive and cost effective insurance cover.

This policy comes with various extensions which can be covered by paying an additional premium. The errors and omission extension, third party liability extensions etc. Warehouseman’s Legal Liability extension provides specialized coverage for cargo liability of an operator of a public commercial storage or distribution warehouse. Motor Truck Cargo Liability extension (MTCL) provides coverage for carriers’ liability for physical loss or damage to goods carried on their owned/leased vehicles.

In case of a claim, first intimate your risk manager as soon as possible about the incident. Then our claim team will inform the insurer and get a surveyor appointed who would visit the accident site to do a survey. You would then need submit claim form, invoices and other documents required by the insurance company within allowed time limit.

The common documents required for filing the claim under various policies are duly filled claim form, invoice of damaged goods, insurance policy, bill of lading, packing list, correspondence with carriers, damage certificate by carrier, FIR, forensic laboratory report (if any). In addition to these documents, the insurer can ask for some additional documents based on the type of claim.

This policy covers the multimodel transport operator's liability. Multimodel Transport operator delineates as transportation of goods under a single contract but performed with at least two different means of transport. Freight forwarders insurance policy takes care of all marine liabilities of the logistics industry. No matter if the mode of transportation is by road, sea or land, this policy will cover different modes of transport under one contract.

Apart from standard exclusions mentioned in your policy copy, a few circumstances which could lead to rejection include non disclosure of important information, improper packaging, delay in informing the insurer, damage due to labour strike; and earthquake related damage, loss due to negligence or in-case of policy lapse. Claims are often rejected if packaging material was sub-standard or not customary.

The premium rate of your freight forwarders cargo policy is calculated on the basis of risk that includes the type of shipment, history of past claim settlements, sum insured, details of voyage and what the cargo is etc. Factors such as length of the journey, means of transport, nature of the product are considered. In addition to these, if you opt for any add-on then the premium will increase.

Premium amount is affected by various factors such as the market price of the cargo, how the cargo will be packaged, invoice, details of voyage, mode of shipment, nature of shipment etc. If you are buying it online, you need to fill some crucial information about the transit and you will get free quotes within no time.

In order to get the best premium discounts and get optimal coverage, it is advised to take the help of an insurance expert such as SecureNow. You can compare per-negotiated quotes from various insurers provided by experts of SecureNow and then choose the most suitable plan for you. In order to start the policy, you can pay premium through cheque, DD, net banking directly to the insurance company you choose to go with.

Yes. Risk perception for each occupancy varies by insurer. It is recommended to take quotes from multiple insurers for efficient price discovery. SecureNow calculators provides a benchmark price across risk occupations. This benchmark is a fair price that is discovered after several rounds of negotiations with insurers.

Freight forwarders insurance policy provides wide range of cover to mitigate the risk to the valuable cargo. Freight forwarders policy covers liability for loss or damage to cargo whilst in transit or in storage during the normal course of transit in the care, custody or control of the insured, or a party with whom the insured has contracted to provide transportation services.

The sum insured is determined on the basis of the market value of the cargo at the place of the receipt of the cargo for carriage. The market value is determined on the basis of cargo sales documents or the market price at which it is possible to buy the cargo in the open market at the place of receipt of the cargo. It is important to buy an optimum level of sum insured limit.

A freight forwarder is exposed to the risk of partial loss of cargo, all cargo damage, fear of loss, negligence or breach of contract, cargo is damaged through the fault of a third party, fines, penalties, legal cost and consequential loss. It is supremely important for a freight forwarder to buy the freight forwarder insurance policy in order to get secure against all the mentioned kind of risks.

This policy can be taken by freight and logistics operators, record management companies, relocation companies, warehouse keepers, road carriers and custom house brokers. Transportation management, Third party logistics, supply management, exporters and importers, cold chain solutions, freight companies and warehouse management majorly buy this policy.

Insuropedia

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

Being a freight forwarder, you are responsible for the damages or lost goods during a transit and in such cases, you might get sued against damaged goods. In order to be on the safe side, a freight forwarder should always ask its clients to buy cargo insurance. Clients should buy cargo insurance as it is their insurable interest to protect the cargo...

What are the extensions available in the freight forwarder liability insurance policy?

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...

What is the Meaning of Free on Board in Marine Insurance?

A marine insurance policy plays an important role by covering you against various losses or damages which may arise during the transportation of goods. While transporting goods, there is free on board term that should catch your attention as it will affect terms & conditions of your marine insurance policy. Free on board or freight...

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