Domestic – Insurance Directive

Domestic - Insurance Directive

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  • Thank you for shipping with Future Forwarding Company. We appreciate your business and want to provide the highest quality service at all times. Please be assured that while every effort is made to ensure safe delivery of your goods, sometimes loss and/or damage does occur.

    Future Forwarding Company’s role and what you will recover should a loss occur.

    Shipping by Ocean

    While Future Forwarding arranges for the transportation of your goods, by law, it is the carrier who bears responsibility for loss or damage to your freight. The carrier’s liability for freight moving over the ocean is governed by the Carriage of Goods by Sea Act (COGSA). Under the terms of COGSA, the most you could recover from shipping lines in the event they are proven negligent is $500 for each customary freight unit (CFU). Measurement of the CFU is widely defined, and it can vary from one container to one pallet.

    COGSA is centered on the liability of the carrier. At the heart of the concept of carrier liability is the idea that the carrier is not responsible for paying claims if they did not cause or contribute to the loss. In the event that Future Forwarding acts as an NVOCC and assumes carrier liability, recovery in the event of a claim is still limited by COGSA in the bill of lading terms and conditions.

    In an effort to better define carrier liability, Hague-Visby rules were created to define 17 circumstances under which the carrier cannot be held liable. If a loss is caused by any one of the following defenses; the ocean carrier will not pay for any part of the loss.

    • Any neglect default of error of the carrier in navigation or of management of the ship
    • Riots or civil commotions
    • Quarantine restrictions
    • Acts of War or public enemies
    • Fire
    • Inherent defect, quality or vice of the goods
    • Acts or omissions of the shipper or owner
    • Defects not discoverable by due diligence
    • Perils or dangers of the sea (storms etc.)
    • Attempting to save life or property at sea
    • Strikes, lockouts or labor shortage
    • Arrest, restraint or seizure
    • Acts of God
    • Insufficient packing

    Shipping by Air

    Air carriers limit their liability in a similar fashion as ocean carriers. Under the Warsaw convention/Montreal Protocol 4, carriers will pay 17 SDRs (about $26) per kilogram only if it can be proven they were negligent. Once again, the burden of proof is on the shipper, and it is often difficult to prove that the carrier was at fault.