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Carrier's and freight forwarder's liability
The carrier is liable for the goods it carries, and the freight forwarder for organising the transport properly. This insurance covers the compensation they must pay their customers on these grounds.
Key points
Carrier's and freight forwarder's liability insurance covers claims from their customers for damage to and loss of goods. The law limits this liability per kilo, and the policy must be aligned with those limits and with the actual business activity.
For domestic land transport, Act 15/2009 limits compensation for loss or damage to one third of the daily IPREM per kilogram of gross weight of the goods (Article 57). This limit does not apply if the damage is caused intentionally or through a knowing breach of a legal duty (Article 62).
That is why carrier's liability insurance does not replace cargo insurance: it covers what the carrier owes, not the full value of the cargo.
What it covers
Loss of or damage to goods
What the carrier must pay the customer, within the statutory and policy limits.
Delays
Liability for late delivery, on the terms of the policy.
Freight forwarder errors
Errors in documentation, customs or choice of carriers.
Legal expenses
Defence against the client's claim.
What to check before taking it out
Type of transport
Domestic, international, refrigerated, dangerous goods: each has its own regime.
Limits per claim and per vehicle
They must be in line with the value of what you carry.
Excluded goods
Some policies exclude high-value or sensitive goods.
Subcontractors
Whether the policy covers transport you subcontract to others.
Frequently asked questions
Does it cover the full value of the goods?
Not necessarily. It covers the carrier's liability, which the law limits per kilo. To cover the full value, you take out cargo insurance.
What makes the freight forwarder different?
It organises transport on the customer's behalf and is liable for errors in that organisation, as well as, where applicable, as a carrier.
Does it cover international transport?
It can, on the terms of the convention applicable to each mode of transport.
Legislation cited: Act 15/2009 on Contracts for the Carriage of Goods by Land (Ley del contrato de transporte terrestre de mercancías), Articles 57 and 62.
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