Transport operator liability insurance, also known as multimodal freight forwarder liability insurance, provides protection against legal liability arising from the loss or damage of goods in accordance with standard trading conditions, international conventions, statutory requirements and liability in line with common law. 

The transport of goods whether via ship, truck, train or plane might involve risk.  Customers and regulatory authorities will want reassurance that adequate coverage with the carrier is in place and will potentially ask for compensation if something goes wrong. 

The main aims of the insurance are to cover liabilities related to the cargo such as damage or loss, errors’ and omissions’, any additional costs such as handling of uncollected cargo; and third party liability – such as accidents happening in supply chain or during cargo loading and unloading. 

Policy limits in terms of payouts and exclusions will depend on the individual insurer or insurers involved in any claim. 
 
It is important to note that if the cargo is damaged, lost, or stolen during transport, the freight forwarder may be liable, even if a third party does the transport. The degree of liability depends on the contract in question, relevant laws, insurance coverage and the circumstances of the loss or damage.

Liabilities arising from errors’ and omissions’ could include negligence or delay and unauthorised delivery. 

The insurance can also cover fines for regulatory breaches such as customs violation, pollution and safety issues at work. In addition, policies can cover the costs of investigations, defence fees and other mitigation costs. It can also cover the disposal costs following an accident, as well as quarantine and disinfection costs. 

Additional coverage upon agreement with an insurer can include: contractual excess liability; general average and salvage guarantees and contributions; third party property damage such as buildings and contents, machinery and handling equipment; losses related to road and rail infrastructure; and ships' agent liabilities. 

Major policy exclusions can include: jewellery or precious stones; currency, coins, bank notes or bullion; gold, silver, platinum, or other precious metals; accounts, bills, deeds, bonds or other evidence of debt or securities; explosives; illegal goods. 
 
This article is sponsored by QBE Hong Kong.  To learn more about QBE Hong Kong, please visit QBE.com/hk  


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