All Risk insurance
Liability limitations of the carrier
The person who entrusts the carrier with his/her goods is often convinced that the carrier is liable for the possible damage to the goods (loss, theft, etc.). Actually, the carrier is only the receiver of the shipping mandate by the sending party (owner of the goods) and it fulfils a transport contract on behalf of the sending party, but the carrier does not respond for the execution of the contract. The carrier, when operating as such and therefore when carrying out partially or totally the transport, avails itself of the pertaining liability limitations, for which we give a brief overview concerning the major kinds of transport:
- € 1,00 / Kg (Legislative Decree 286/2005 – road transportation within the Italian territory)
- 8,33 SDR (*) / Kg (CMR – road transportation on international territory)
- 19 SDR (*) / Kg (Montreal Agreement – air transportation)
- 2 SDR (*) / Kg or 666,7 SDR (*) for each load unit (Bruxelles Agreement and L’Aja-Visby rules – maritime transportation)
- 17 SDR (*) / Kg (CIM Agreement – rail transportation)
(*) SDR = Special Drawing Right (for example, as at 30.01.17 €1,28 – you can check the exchange rate at http://www.if.org/external/np/fin/data/param_rms_mth.aspx)
The regulation providing for the above mentioned maximums also lists a series of reasons excluding the carrier’s liability (for example, the robbery normally falls into the fluke or case of force majeure domain).
The goods are exposed to various kinds of risk that the carrier cannot completely eliminate even if the precautions and safety measures adopted are getting more and more appropriate.
FERCAM offers the possibility to stipulate All risk supplementary policy covering the whole value of the goods and every kind of risk, allowing the goods to get to their destination overcoming any kind of danger connected to the transport.
Being it a supplementary service to the main mandate, its request needs to be formulated by writing by the sending party with the subsequent accordance of the pertaining cost, covering the necessary costs for the activation of the insurance and the management of the documents, as well as the customer care in case of accidents.
Only material damages to the goods are eligible for the compensation. Allowances and overdrafts are usually provided for in case of damage. The insurance coverage can be confirmed by specific insurance certificates, which can be requested by letters of credit.
The value to be insured has to be correctly determined because in case of damage the insured value will be used as reference for the calculation of the compensation. It would be therefore completely pointless to declare higher values than the actual ones, because in case of damage only the actual value of the goods is taken into consideration. Declaring lower values to reduce the insurance costs could be counter-productive in case of accident because the compensation would be reduced as per the declared and insured value. The declaration of the value to be insured must be as correct and consistent with the actual value as possible and to this end also packaging costs, customs duties, rental, insurance costs and the transportation costs to the final destination are usually taken into consideration. It is also possible to add a percentage of the expected income stemming from the sale of the goods (usually 10%).
ATTENTION: all of the above has a merely descriptive and exemplifying purpose and it does not imply any kind of contractual obligation, neither implicit nor tacit.