The core responsibility of any transport carrier is to deliver goods safely and undamaged to the destination. But any transportation system is prone to numerous risks that may hamper this fundamental responsibility and make the carrier liable for damages or loss to the transported material.
Carrier’s legal liability insurance is a hedge against financial loss due to damage to or loss of goods while being transported from one place to another. This cover is valid from the time of the loading till unloading of the merchandise and also while the cargo is temporarily housed or stored in between while still being transported.
The five important factors to look for while availing a Carrier’s legal liability cover are as follows:
Area of transportation
A Carrier’s legal liability insurance will cover the expenses for the goods lost or destroyed in case of accidental fire, explosion or accident caused to the vehicle carrying them.
If you need to transport goods in a flood-prone area or in a zone where riots are quite common, it is most beneficial to avail this safety cover to avoid a significant loss. In such a case, you need to look at the provisions in the carrier’s legal liability policy that enable you to meet maximum expenses in the event of these particular mishaps. This also applies to the destruction caused due to other such natural disasters like cyclone and hurricane leading to cargo damage.
At the same time, you need to form a safety net for unexpected happenings like fire or accident.
Terms of negotiation
Businesses generally avail the services of a third-party or carriers to transport their raw materials or finished goods. A Carrier’s liability insurance may be divided in such cases between the service provider (carrier) and the insured party or business.
If the carrier itself is held responsible for some part of the loss under the agreement of transport, that part will not be covered by the insurance. Instead, the insurer will proportionately reduce the supporting compensation for any admissible financial loss.
Imagine if there is a delay in transit due to flooding, blockade or riots in an area. You may need to store the goods in some warehouse. The expenses incurred due to such emergency storage might have to be borne by the carrier.
In such cases, the goods may also need to be loaded and unloaded in a different vehicle which increases the carrier’s charges as well as the risk of damage to goods. A carrier’s liability cover will provide for such transhipment and emergency storage expenses.
These also include the costs of a third-party who might have saved the cargo using various means from significant damage. For example, if there is an accidental fire in the vehicle carrying the load and it is immediately extinguished by a fire service agency nearby leading to less damage to goods, the expenses incurred on their behalf are also covered under this policy.
Protection against unexpected lawsuits
The unexpected litigation cases are common in this business as well. There may be unexpected lawsuits over some issues arising out of mistakes of others. This may include the cases of major accidents, rash management of the cargo while loading or unloading of goods, the mishandling of cargo on the part of the carrier, etc.
A carrier’s legal liability policy will enable the insured to build a safety net against such long-term litigation procedures. If a policy is not availed in such cases, it might also lead to a significant chunk of your business or earnings being compromised. Moreover, due to lack of the safety net, you may be forced to not avail your fair compensation as a result of the lost or damaged cargo.
Cost of adjuster
An average adjuster or investigator in the case of an accident will review the situation where the incident occurred. He will have to talk to the witnesses, consult the police and the hospital before deriving the cause of the damage and whether such costs can be covered by the carrier’s liability policy.
Selecting the best plan for your transport business will be easier if you can compare all the five factors mentioned above at one place. This is possible through different Insurance Brokers in India who can not only assist you with a comparison of features but also with the comparable quotes from different insurers.