Do You Know Your True Legal Liability On Damage Claims?

The freight forwarder who arranges for movement of customers' freight may believe he is not exposed to claims alleging damage to that freight if he does not physically handle it. This is a mistake! If a bill of lading is issued in your name (such as an NVOCC or house air waybill), or if you occasionally hold freight at your office for short periods of time, you can be held liable for damage.

Operating a warehouse and performing local cartage services creates a legal responsibility for the cargo while it is in your custody. Limitations of liability written into your warehouse receipt or bill of lading do not apply if a value is declared on the bill of lading and may, in fact, be overturned under some circumstances.

Examples of Claims:

• Cargo is stolen off of a freight forwarder's dock while waiting to be consolidated with other shipments.
• An air freight forwarder allows his customer to declare a value on his house air waybill. The forwarder does not pass along the higher value to the airline via the master bill of lading. Cargo arrives damaged. The airline is liable only for $0.50 per pound (generally) and only if the claim is filed within seven days.
• A shipment of liquid in various sized tanks is delivered incorrectly; larger tanks are delivered to the smaller customer and vice versa. By the time the error is discovered, the smaller customer has sold the liquid. The NVOCC is liable for the shortage to the larger customer.

What to Do? Purchase Legal Liability Insurance

Roanoke Trade has written a legal liability form, which can be added to a marine cargo policy providing broad protection for any of the above circumstances. It can include:

• NVOCC Legal Liability
• Indirect Air Carrier Liability
• Warehouse Legal Liability
• Bailee Liability
• Motor Truck Cargo

Each of these coverages protects you for a specific operation you perform. The policy pays for damages for which you are found to be legally liable, and defense costs of claims made against you, whether or not you are liable. The costs of defense can and do far outweigh the damage payments in many liability cases.

Look to Roanoke Trade to provide your legal liability insurance solutions.  Contact us for more information on cargo insurance.