Freight forward liability insurance is not mandatory. Most freight forwarders purchase this insurance, to make sure that they are protected against risks and damage arising from errors or unpredictable situations.
Many people get confused between Cargo and Freight Forwarders insurance. In Freight Forwarders, insurance protects the company in charge of the transit. Meanwhile, cargo insurance is designed to protect the sender of the goods (e.g. manufacturers, sellers).
Regardless of a company’s best efforts to avoid the risks, there’s always a chance that the unthinkable will happen. When it does, the freight forward company will be held liable for the damages. These damages will be a significant amount, which can shut down a business. Therefore, having the right Freight forwarder insurance is crucial.