Risks covered in Freight Forwarder Liability ~ Insurance Academy

In the previous article you have understood the importance of freight forwarder liability (FFL) insurance for an expedition company. Now we will see what risks are guaranteed in the FFL.

The FFL policy provides complete coverage for all activities of the freight forwarder. The guarantee is not only limited to the risk of loss and damage to cargo but also guarantees consequential loss, misdelivery, delay, fines & duties, and of course guarantees against third party legal liability, with the following explanation:

Cargo and Related Liabilities
Covers legal liability for loss or damage to cargo that is in the handling or supervision of the freight forwarder company in accordance with international carriage conventions or contracts of carriage (if any), including:

Physical damage or loss to cargo
Physical damage or loss to third party vessels or equipment
Continuation loss or extra costs (direct consequential loss) as a result of damage or loss a and b
Delivery errors, cargo delivery and delays due to negligence in carrying out SOPs (delay, incorrect or wrongful delivery of cargo, failure or omission to follow specific instruction)
General Average cost contribution that cannot be obtained from the client (cargo’s contribution to general average and salvage which the Insured is unable to recover form the Customers)

Third Party Liability (TPL)
Covers legal liability for bodily injury or property damage to third parties as a result of an accident that occurs during transportation or freight forwarder activities. TPL risks include:

Third party bodily injury
Damage or loss to third party property (loss or damage to third party property)
Continuing losses or extra costs (direct consequential loss) suffered by third parties as a result of the first and second points above

Liability for Fines & Duty
Guarantee legal liability for all costs, fines due to violation of customs rules (custom) or applicable regulations (Unintentional breach of any law or statutory provision) in connection with:

Export-import cargo
Equipment used for the transportation or handling of cargo
Immigration (immigration)
K3 (safety of working conditions)

Claims Expenses
FFL covers court and attorney fees in the claims process and claims settlement. These costs include:

surveyor, lawyer, or expert fees
costs of destroying cargo
quarantine, fumigation, disinfectant costs (other than for normal procedures)

How to close FFL? Some insurance companies will ask the forwarder company to fill out a proposal form. Some don’t need it, but it’s enough to provide:
– Company profile
– Portfolio or company turnover for a year
– Coverage area (domestic or international?)
– Last 3 years claim experience
– The desired limit of liability

Image source: Transportify.com