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.
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.
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.
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.
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.
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.
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.
There are many variations of Freight forwarders insurance in the offerings from different insurers. Below are some of the common coverage under this insurance:
Some of the common exclusions under the Freight forwarders insurance are:
There are various other associated risk that can be mitigated by including the following extensions in the freight forwarder insurance policy.
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.
One can buy Freight forwarders liability insurance online from SecureNow by following the below mentioned simple steps:
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:
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