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  • > Benefits of Freight Forwarders Insurance
  • > Quick Guide to Freight Forwarders Insurance
  • > Frequently Asked Questions
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Benefits of Freight Forwarders Insurance

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.

Quick Guide to Freight Forwarders Insurance

What is Freight Forwarders Liability Insurance Policy?

Freight forwarder liability insurance or FFL insurance is meant for companies or individuals who handle and coordinate the shipment of goods from one point to another via sea, air, rail, or road. A freight forwarder acts as intermediaries between shippers and carriers, using their expertise and connections to ensure that goods are transported efficiently and cost-effectively.

is specifically designed to protect the freight forwarders against accidental damage or losses to the cargo until the time it is delivered. In addition to the basic carrier policy, this policy provides additional protection to your freight. Unlike basic carrier policies that compensate only the blanket amounts and not the freight’s value, FFL policy will recompense the full value of your shipment. To be eligible for claim, the loss or damage should be caused due to the fault of the carrier. Freight forwarders insurance policy also covers damage caused due to adverse weather-conditions, inadequate packaging, loading errors for which the carrier is not at fault or is not responsible for the loss/damage.

The significance of Freight Forwarders Liability Insurance lies in its ability to financially protect companies against claims from third parties for lost shipments. It takes off the financial liability from your shoulder resulting in peace of mind.

What are the liabilities of freight forwarders?

A business should consider buying freight forwarder liability insurance when they are shipping valuable or fragile goods, when the transportation route involves high-risk areas, or when the potential loss or damage of the goods during transit would have a significant financial impact on the business. These include , loss of or damage to cargo, liabilities against third parties, loss of or damage to cargo, errors and omissions, removal of abandoned cargo, breach of regulations and loss of or damage to owned or leased equipment.

Why Is Freight Forwarder Liability Insurance Crucial?

Freight forwarder liability insurance is crucial for several reasons. It provides financial protection in the event of losses or damages to the goods being transported. This can be especially important for high-value or fragile items, as the cost of replacing or repairing them can be significant.

FFL insurance can also cover legal expenses in the event of a dispute or lawsuit. There are many instances where claim may be unjustified. For such situations freight forwarders must be prepared to challenge the claim. Here the insurance comes handy as it assists the freight forwarder in defending itself by covering lawyer expenses and possible settlement costs.

Freight forwarder liability (FFL) insurance covers freight forwarders’ liability to help the business recover quickly and continue its operations. It is important for prospective buyers to communication with the insurer to get the best cover for their exact needs.

Coverage under Freight Forwarders Liability Insurance Policy

There are many variations of Freight forwarders insurance in the offerings from different insurers. Below are some of the common coverage under this insurance:

  • Carrier’s Liability : The carrier is liable to safely transport the goods which it has taken charge in good condition. If the goods are damaged due to any reason, the extent of liability of damages of the goods must be determined and refunded by the carrier.

  • Errors and Omission: Transporting cargo is a tedious process and it involves lot of paperwork, documentation, agreements etc. This paperwork forms a part of the duty of the freight forwarder. Any error in documentation or any negligence in following the process can result in fines, compensation or lawsuits. The freight forwarder insurance protects freight forwarder from any claim arising out of financial loss to clients.

  • Third-party Liability: The freight forwarder liability insurance typically pays for medical, legal and compensation costs that arise due to the third-party claim, as a result of an accident.

  • General Average: The freight forwarder industry is subject to several national and international regulations. If there is a breach of regulations, it may lead to heavy fines and lawsuits. A general average is a cost that is decided to help recover from the situation. Under this policy all the parties involved, including the freight forwarder, have to share the losses.

  • Assured Transport Equipment and Employee Tools: Freight forwarders insurance policy may also cover any physical loss or damage to the assured's transport equipment or employee tools in the vehicle operated by the assured.

Exclusions of freight forwarder Insurance

Some of the common exclusions under the Freight forwarders insurance are:

  • Damage or loss caused by acts of nature such as earthquakes, floods, and other natural disasters.
  • Packaging & hook losses
  • Negligence of consignor
  • financial default or insolvency
  • Wilful misconduct or Intentional damage
  • Ordinary leakage, wear and tear and loss in weight or volume
  • Loss as a result of inadequate packing
  • Loss due to war, strikes or terrorism
  • Losses resulting from illegal or prohibited goods being transported

  • However, aforesaid aspects can be insured at a fee. To get complete coverage one must not violate the policy terms.

What are the add-ons available in the freight forwarder liability insurance policy?

There are various other associated risk that can be mitigated by including the following extensions in the freight forwarder insurance policy.

  • Professional indemnity insurance: It covers any negligent act of the freight forwarder or breach of contract by involved parties. It additionally covers the error or omission committed by employees, sub-contractors, or agents

  • Third party Liability Insurance: Third-party liability covers any bodily injury or third-party property damage as a result of the business operations. It also covers the legal liability and consequential loss suffered by the third-party arising out of an accident while performing the services.

  • Loss of Documents extension: Under loss of document extension, the policy covers documents for any loss during transit or from the custody of the insured. It helps insured to restore or recover the lost document and all the costs and expenses are borne by the insurer.

  • Fines and Duties Liability Insurance:This add-on provides protection against unintentional breaches of any regulation which results in fines/penalties imposed by a competent authority on freight forwarders. It does not cover the freight tariffs through.

Different insurance companies offer different set of add-on covers under freight forwarders insurance policy. Buyers should study the policy wordings and check with the insurance company about the coverage. They should also identify which add-on cover is essential for their business. The exposure to risk plays a key role in identifying the requirement of add-on coverage. As a freight forwarder, one should always buy freight forwarders insurance and include additional coverage for complete risk protection.

How to buy Freight Forwarders Insurance online from SecureNow?

One can buy Freight forwarders liability insurance online from SecureNow by following the below mentioned simple steps:

  • Visit, select ‘Profession’, then   Freight Forwarders’
  • Fill your contact details and click on ‘Next’
  • We will call you back, share the proposal form, payment link/NEFT details
  • Policy copy will get issued instantly at your registered email id once you are done with making the payment

Documents required to raise claim under freight forwarders insurance?

Proper documentation is crucial when filing FFL Insurance claim, as it serves as proof of loss and aids in the claims process. The documents required to raise a claim under freight forwarders' insurance, include:

  • A copy of original bill of lading
  • A copy of the invoice stating the value of the shipment
  • Documentation on the proof of delivery regarding damage/shortage
  • A written statement of incurred loss, damage, or shortage

Frequently Asked Questions

In simple terms, a freight forwarder is an agent responsible for the movement of goods on behalf of the cargo owner. The responsibility can start from the time the goods are picked up from the seller until they are delivered at the buyer’s specified location. The responsibilities of a freight forwarder are sometimes fulfilled by a clearing and forwarding (C&F) agent.
Insurance for freight forwarders 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.
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.
Freight forwarders insurance policy (FFL Insurance) 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 mporters, cold chain solutions, freight companies and warehouse management majorly buy this policy


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...
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The Liabilities Of Freight Forwarder And How It Can Be Covered.

A freight forwarder is one who arranges shipment of a consignment or transport services on behalf of importers, exporters or other companies under a single contract which involves inland transit or more than one different modes of transport....
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What are the extensions available in the freight forwarder liability insurance policy?

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