What is Freight Forwarder Liability  Insurance?

Freight Forward Insurance

A freight forwarder is responsible for transporting goods between one destination and another -through the sea, air, train or road. Freight forwarding is one of the most widely used methods of international transport for both business and personal use.

Freight Forwarders Liability (FFL) Insurance provides coverage against unpredictable damages or losses.

This insurance is crucial as it provides financial cover to the companies from the claims made by third parties for the lost shipment. Therefore, it helps businesses reduce financial loss and the risks involved if something does go wrong during the journey.

What is covered?

Freight Forwarder Insurance covers aspects such as:

  • Damage or loss to the cargo during transit
  • Recovery and maintenance costs
  • Custom fines and duties, including delays due to errors
  • Third-party liabilities (like legal expenses, mitigation costs, debris removal, etc.)
  • Uncollected or abandoned cargo
  • Financial claims from shippers and receivers
  • Operational services (like distribution, storage, haulage, packaging, etc.) against fire, explosion, or dangerous natural weather
  • Legal protection services to tackle unjustified third-party claims,
  • Coverage for personal injury or employee injury during operations

What should you know?

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.


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