'Don't make assumptions about liability' - Price Forbes

CARGO INSURANCE protection options, that offer the same buying power available to freight
forwarders, are now at the disposal of cargo owners. This
is in addition to industry
expertise through which risk control measures are facilitated, says Robyn Martine, a consultant to Transportation Risk Management Services (TRMS), a division of Price Forbes.
The benefits of this, when combined with ease of administration, provide a formula for reducing the cost of cargo protection, she said.
The complex transportation chain, involving numerous parties, demands that responsibilities and liabilities towards cargo and their costs, are clearly identifiable. Any absence of such identification leads to necessary dual insurance protection, as each party seeks to insure his interest in relation to cargo.
This follows the development over the last decade of cost-driven trends generated by market forces - the provision of integrated services being a notable example of this. And, says Martine, the freight industry has by no means escaped the trend towards 'one-stop' buying, with clients increasingly demanding an integrated service inclusive of cargo insurance.
In response to these market demands, freight operators restricted the limits of their liability, while simultaneously offering clients the option of purchasing cargo insurance - the costs of which are borne by individual clients. This then obviates any need for cargo owners to purchase traditional marine insurance in the conventional manner.
However, Martine adds a cautionary word. Some cargo owners, she says, remain convinced that the freight operator has a moral obligation to assume full liability for cargo. Proponents of this misguided approached completely ignore factors such as duplication in protection costs and the protracted and costly liability claim process, which results from rigorous defence of claims. Added to this is the inevitable deterioration of commercial relations between the parties.
On the other hand, the adoption of cargo insurance offered by the freight operator, or acceptance of limited liability imposed under contract, results in the elimination of dual insurance and complete transparency regarding costs of protection - to which every cargo owner is entitled.