If your goods are damaged in transit, who would you turn to? Are your goods covered? Who will compensate you and what are your rights?

International transport is a complex process, and things do go wrong. It is inevitable that regular shippers will, sooner or later, encounter an incident where goods are lost or damaged, or subject to a claim for general average or salvage. We strongly recommend that you take our cargo insurance, for the peace of mind and protection against uninsured losses.

It is a misconception that the goods are automatically insured by the forwarder or carrier/haulier. Only the owner of the goods can insure them, although this can be arranged through the forwarder (if requested and for a fee). The liability of the forwarder or carrier (whether a shipping line, a haulier or an airline or rail operator) will be governed by mandatory conventions and/or contractual terms, which in many cases will limit the carriers’ liability to the goods owner to less than the cargo value. Our liability, pursuant to the Standard Trading Conditions of the British International Freight Association, is limited to 2 SDRs per kilo of the goods lost or damaged, and there are other limitations and exceptions to liability that may apply.

For this reason, “cargo” or “marine” insurance over the goods themselves is wise. This means you don’t have to worry about bring a claim against us, or the carrier, or concern yourself with what limits may apply in any such claims. The insurance will also cover risks that may arise in the event of general average or salvage situation, should there be an incident affecting the carrying vessel during ocean carriage.

Your Neptune adviser can assist you with arranging insurance of the goods, through an insurance facility that we hold with a reputable insurer. If requested, we can place the insurance on your behalf almost immediately, provided that your request is made before the shipment commences and we agree to arrange the insurance. You will be insured, on the usual terms of our insurance facility (which typically would mean extensive cover on the basis of the Institute Cargo Clauses A, but in some cases more limited cover provided by the B or C Clauses), and in the event of an incident giving rise to a claim you will simply need to follow the claims procedure with the insurer. The contract of insurance is between you and the insurer. You will not be concerned with establishing “blame” – provided the goods were properly packed for transport and the claim complies with the policy requirements the insurer will ordinarily compensate you based on the insured value of the goods. The insurance will only cover a “transit fortuity”, and would not, for example, cover a pre-shipment issue with the quality of the goods, a short-loading of the goods by the shipper or inadequate packaging that caused or contributed to any loss or damage. A deductible (similar to what is known as an “excess” in other forms of insurance) will apply to all claims, which will be advised to you.

Premiums are reasonable and give you the peace of mind that if something goes wrong during the transport you will be able to claim from reputable insurers, subject to any agreed deductible and satisfying the usual and reasonable requirements of the insurers. The premium is based on the value of the goods and calculated as a percentage of that value. You must declare the value of the goods, which would usually be the “CIF value”, which means the value of the goods as they land at destination, including the costs of shipping and insuring them. It is important to declare a true and honest value of the goods, usually based on what you paid for them, plus carriage and insurance (if the purchase price did not include such costs).

You can arrange your own insurance, but if you do so we ask you to let us know. We are likely to insist that for any cargoes that will be consolidated for shipment that you either ask us to arrange insurance, or establish that you have arranged the insurance yourself. This is because uninsured cargoes can disrupt the release of other cargoes with which they are consolidated, in the event of a general average or salvage situation (see section [ General Average and Salvage ] for an explanation of general average and salvage.)