CARRIER LIMIT OF LIABILITY FOR INTERNATIONAL SHIPPING?

 

CARRIER LIMIT OF LIABILITY FOR INTERNATIONAL SHIPPING?

(IN THE EVENT OF DAMAGE, LOSS, OR DELAY OF CARGO)

 

WHAT IS CARRIER LIMIT OF LIABILITY?

•      •       THE CARRIER LIMIT OF LIABILITY DETERMINES THE MAXIMUM AMOUNT OF MONEY THAT CARRIERS CAN BE HELD LIABLE FOR IN THE EVENT OF DAMAGE, LOSS, OR DELAY OF CARGO.
• •       HOWEVER, LIMITS OF LIABILITY VARY BETWEEN CARRIERS AND SITUATIONS.

WHAT IS COVERED?

• •       CARRIER LIMIT OF LIABILITY COVERS DAMAGE OR LOSS THAT OCCURRED DUE TO CARRIER NEGLIGENCE.
• •       TO SETTLE A CLAIM, THE RESPONSIBILITY IS TYPICALLY ON THE IMPORTERS / SHIPPER TO PROVE THAT THE DAMAGE WAS THE FAULT OF THE CARRIER.
• •       THERE IS ALSO NO OFFICIAL DEADLINE TO SETTLE A CLAIM SO THAT THE PROCESS COULD DRAG ON FOR MONTHS.
• •       FOR A CARRIER TO BE LIABLE FOR LOSS OR DAMAGE, IMPORTERS / SHIPPER HAVE TO PROVE THAT THEIR CARGO WAS IN GOOD CONDITION WHEN GIVEN TO THE CARRIER, BUT WAS DELIVERED DAMAGED, OR NOT DELIVERED, AND THEY MUST PROVE THE AMOUNT OF THE DAMAGE THEY ARE CLAIMING.
• •       IMPORTERS / SHIPPER MUST FILE CLAIMS WITHIN NINE MONTHS OF THE DATE UPON WHICH DELIVERY WAS OR SHOULD HAVE BEEN MADE.
• •       CARRIERS HAVE 30 DAYS TO ACKNOWLEDGE A CLAIM HAS BEEN MADE AND MUST RESPOND TO THE SHIPPER WITHIN 120 DAYS.

WHAT IS NOT COVERED?

• CARRIERS ARE NOT HELD RESPONSIBLE FOR DAMAGE OR LOSS THAT OCCURS DUE TO:

1. AN ACT OF GOD, LIKE EXTREME WEATHER OR A NATURAL DISASTER
2. FIRE
3. INTERFERENCE BY A PUBLIC ENEMY
4. ACT OF WAR, LIKE STRIKES, RIOTS OR CIVIL FUSSES.
5. IMPROPER PACKAGING OF CARGO BY THE SHIPPER
6. GOVERNMENT ACTION, LIKE ROAD CLOSURES, QUARANTINES, OR TRADE BANS.
7. GOODS THAT ARE PRONE TO SPOIL OR BECOME DEFECTIVE OVER TIME, LIKE CROP, TOBACCO, OR MEDICAL.
8. LATENT DEFECTS TO THE HULL OR MACHINERY (A LATENT DEFECT IS DEFINED AS A DEFECT WHICH EXISTS AT THE TIME OF ACCEPTANCE BUT CANNOT BE DISCOVERED BY A REASONABLE INSPECTION).
9. CRIMINAL ACTS OR NEGLIGENCE BY MASTER OR CREW

CARRIER LIABILITY CLAIMS PROCESS VS. CARGO INSURANCE CLAIMS PROCESS

 

A . IF YOU ARE MAKING A CLAIM AND YOUR FREIGHT IS ONLY COVERED BY CARRIER LIMIT OF LIABILITY COVERAGE:

1. YOUR CLAIM MUST BE FILED WITHIN NINE MONTHS OF DELIVERY.
2. THE DELIVERY RECEIPT HAS TO INCLUDE NOTICE OF DAMAGE.
3. PROOF OF VALUE AND LOSS IS REQUIRED.
4. CARRIERS HAVE 30 DAYS TO ACKNOWLEDGE YOUR CLAIM AND HAVE TO RESPOND WITHIN 120 DAYS.
5. CARRIER NEGLIGENCE HAS TO BE PROVEN.

B. IF YOUR SHIPMENT IS COVERED BY FREIGHT INSURANCE:

1. PROOF OF VALUE AND LOSS IS REQUIRED.
2. CLAIMS ARE TYPICALLY PAID WITHIN 30 DAYS.
3. YOU ARE NOT REQUIRED TO PROVE CARRIER NEGLIGENCE.

 

TYPES OF MARINE INSURANCE

 

TYPES OF MARINE INSURANCE

Freight Insurance

Liability Insurance

Hull Insurance

Marine Cargo Insurance

 

1. Freight Insurance

•       PROVIDES PROTECTION AGAINST THE LOSS OF FREIGHT.

•       IN MANY CASES, THE OWNER OF GOODS IS BOUND TO PAY FREIGHT, UNDER THE TERMS OF THE CONTRACT, ONLY WHEN THE GOODS ARE SAFELY DELIVERED AT THE PORT OF DESTINATION.

•       IF THE GOODS ARE DAMAGED IN TRANSIT, THE OPERATOR WOULD LOSE FREIGHT RECEIVABLES & SO THE INSURANCE WILL BE PROVIDED ON COMPENSATION FOR LOSS OF FREIGHT.

•       FREIGHT INSURANCE OFFERS AND PROVIDES PROTECTION TO MERCHANT VESSELS’ CORPORATIONS WHICH STAND A CHANCE OF LOSING MONEY IN THE FORM OF FREIGHT IN CASE THE CARGO IS LOST DUE TO THE SHIP MEETING WITH AN ACCIDENT.

•       THIS TYPE OF MARINE INSURANCE SOLVES THE PROBLEM OF COMPANIES LOSING MONEY BECAUSE OF A FEW EXCEPTIONAL EVENTS AND ACCIDENTS OCCURRING.

2.    Liability Insurance

•       MARINE LIABILITY INSURANCE IS ONE IN WHICH THE INSURER UNDERTAKES TO INDEMNIFY AGAINST THE LOSS WHICH THE INSURED MAY SUFFER ON ACCOUNT OF LIABILITY TO A THIRD PARTY CAUSED BY COLLISION OF THE SHIP AND OTHER SIMILAR HAZARDS.

3.    Hull Insurance

•       HULL INSURANCE: HULL INSURANCE MAINLY PROVIDESTHE UPPER BODY AND HULL OF THE VESSEL ALONG WITH ALL THE ARTICLES AND PIECES OF FURNITURE ON THE SHIP. THIS TYPE OF MARINE INSURANCE IS MOSTLY TAKEN OUT BY THE OWNER OF THE SHIP TO AVOID ANY LOSS TO THE VESSEL IN CASE OF ANY MISHAPS OCCURRING.

•       MACHINERY INSURANCE: ALL THE ESSENTIAL MACHINERY ARE COVERED UNDER THIS INSURANCE AND IN CASE OF ANY OPERATIONAL / ACCIDENTAL  DAMAGES, CLAIMS CAN BE COMPENSATED.

•       THE ABOVE TWO INSURANCES ALSO COME AS ONE UNDER HULL & MACHINERY (H&M) INSURANCE.

•       THE H&M INSURANCE CAN ALSO BE EXTENDED TO COVER WAR RISK COVERS AND STRIKE COVER (STRIKE IN PORT MAY LED TO DELAY AND INCREASE IN COSTS)

4.    Marine Cargo Insurance

•       MARINE CARGO INSURANCE IS A SUB SECTION OF MARINE INSURANCE.

•       THE PROTECTION IT PROVIDES IS AGAINST THE LOSS OR THEFT AND DAMAGE CAUSED TO CARGO DURING TRANSIT NETWORKS. 

•       THERE ARE TWO TYPES OF MARINE CARGO INSURANCE

1. ALL-RISK MARINE CARGO INSURANCE.
2. NAMED PERILS MARINE CARGO INSURANCE.

Types of Marine Cargo Insurance Coverage

1.    ALL-RISK MARINE CARGO INSURANCE COVERAGE

2.    NAMED PERILS MARINE CARGO INSURANCE COVERAGE

ALL-RISK MARINE CARGO INSURANCE

•       INSTITUTE CARGO CLAUSE A IS THE WIDEST COVERAGE YOU CAN PURCHASE, ALSO KNOWN AS AN ‘ALL RISKS’ CARGO INSURANCE POLICY.

•       FOR THIS REASON, IT IS THE MOST EXPENSIVE OF THE THREE ( A,B, & C). 

 

WHAT EXACTLY DOES IT COVER?

•       CLAUSE A COVERS MAXIMUM RISKS.

•       IT CAN COVER THE CARGO, CONTAINER, AND TRANSPORTATION, AND ANY EXCLUSIONS CAN BE FOUND IN THE GENERAL EXCLUSION CLAUSES.

NAMED PERILS MARINE CARGO INSURANCE

•       NAMED PERILS COVERAGE REFERS TO INSTITUTE CARGO CLAUSES ‘B’ AND ‘C’.

•       WHICH ARE MORE RESTRICTIVE TYPES OF MARINE CARGO INSURANCE.

•       THIS INCLUDES VARIOUS DEGREES OF NARROWER COVERAGE THAT WILL ONLY COVER THE LOSS IF IT IS CAUSED BY SPECIFIC, NAMED PERILS SUCH AS SINKING, STRANDING, OR BURNING.

•       ANY PERIL NOT NAMED IN THESE POLICY TYPES IS NOT COVERED BY THE INSURANCE.

WHAT IS CARRIER LIMIT OF LIABILITY?

 

•       THE TWO MAIN TYPES OF CARGO INSURANCE COVERAGE AN IMPORTER CAN PURCHASE TO PROTECT THEIR GOODS WHILE IN TRANSIT ARE        ALL-RISK AND NAMED PERILS.

•       IF AN IMPORTER DOES NOT PURCHASE CARGO INSURANCE, THEY ARE ONLY COVERED BY CARRIER LIMIT OF LIABILITY.

•       THE CARRIER LIMIT OF LIABILITY DETERMINES THE MAXIMUM AMOUNT OF MONEY THAT CARRIERS CAN BE HELD LIABLE FOR IN THE EVENT OF DAMAGE, LOSS, OR DELAY OF CARGO. HOWEVER, LIMITS OF LIABILITY VARY BETWEEN CARRIERS AND SITUATIONS.