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Freight Forwarders Liability Insurance covers your legal liability whilst providing services of any kind relating to the carriage, consolidation, storage, handling, packing or distribution of Customers goods and subject to your Standard Trading Conditions.
Freight Forwarders Liability Insurance covers Freight Forwarders legal liability arising from the damage to goods whilst they are in their custody and control.
However, unless the Freight Forwarder can be found to be legally liable in relation to their negligent handling of the goods then there is no compensation due to the owner of the damaged or lost goods.
In circumstances where the Freight Forwarder is found to be negligent, then the compensation available from Freight Forwarders Liability Insurance is limited to their standard trading conditions and payments are calculated applying a rate per kilo in respect of goods lost or damaged.
The rates applied are called Standard Drawing Rights (SDRs) and were introduced by the IMF in 1971 in an effort to regulate international commerce. The level of SDRs paid per kilo depends on the standard trading conditions employed by the Freight Forwarder.
Under the standard trading conditions (1989 Edition) of the Irish International Freight Association (IIFA) payments in respect of losses due to the Freight Forwarders negligence are made at 2 Standard Drawing Rights (SDR’s) per Kilo which equates to approximately €2,200.00 per tonne.
These are the standard trading terms upon which Freight Forwarders and Manufacturers conduct business within Ireland. The conditions contained within these terms are the basis of any contract between the Freight Forwarder and the Manufacturer, unless otherwise agreed.
Some Freight Forwarders provide increased limits, but again this is still only in relation to incidents, in which they are found to be legally liable.
It is important for the Freight Forwarder to extend their Freight Forwarders Liability Insurance policy to include these increased limits otherwise the Freight Forwarder will be assuming liability beyond the limits under the Standard Trading Conditions covered under the policy and will be left exposed for the difference.
