B-3- INSURANCE FOR TRANSPORT OF GOODS


International transactions are unique because they are more risky than simple, national transactions. This is why companies should protect themselves against damages with insurance for each event during the import or export transaction. However, here, we will only deal with insurance for transport of goods.

We can distinguish different kinds of insurance depending on the type of transport, insurance for air transportation, sea transportation, and/or land transportation.

3-1-  Transport insurance required in case of damage.

In fact, often the export transportation packaging is not sufficient, and goods get damaged. It is therefore better to protect against these inconveniences by getting an insurance contract. The freight forwarder will have to advise its customer.

It's also important to make a distinction between ad valorem insurance (depending on the value of goods) and liability insurance.

3-2-  Transport insurance and responsibility

It's obvious that the company responsible for the transport of the goods will be also responsible for the damage. This is as true for a forwarder transport, as it is for a freight forwarder. The goods must, of course, be well-packaged to avoid the carrier protecting itself by using “inadequate packaging.”

3-3- Transport insurance and limits of liability

The carrier may also legally invoke exemptions from responsibility -- for example, in case of "force majeure" -- and therefore uses its own conventions. In addition, you should know that liability is still limited to a certain value.

3-4- Transport insurance and procedures

It's preferable before engaging in an international transaction, especially if it's the first or one of the first transactions you are making to:
  • know what to do in case of a disaster,
  • know the procedure in case of a disaster,
  • anticipate the costs,
  • remember all the insurance documents required,
  • know how the reserves must be written,
  • know what not having any insurance involves and the obligations you have,
  • know what you have to do in the event something happens and you don't have transport insurance.