Why do I need Freight Liability Insurance?

We’re often asked “What is Freight Liability Insurance?” But this is the wrong question to ask.

So we often end up answering the question “Why do you need Freight Liability Insurance?” Let’s use “Lock, Stock and Two Smoking Barrels” to help answer the question.

The short answer? Charles Forbes didn’t keep the cage locked, and realised a little too late, you need your protections in place. Well, if you’re a freight forwarder, you need freight liability insurance for protection.

So what is a liability?

The Guv’nor hits it pretty well for me

My first understanding of the word ‘liability’ was when Barry the Baptist described Eddie to Harry the Hatchett as a …liability (I’m obviously editing for daytime reading).

The word liability has different meanings depending on the context. In the case of Lock Stock, Eddie was a good card player who Harry and Barry had to ultimately cheat to take to the cleaners. In Insurance, Contract Law, Common Law and Tort Law are the card games that come into play.

Contract, Tort Law… Common Law…??? Don’t worry, this is not one of those high-powered jobs

If a third party injures you or damages your property, you’re likely entitled to compensation from that party, and that’s because the law protects and obligates everyone in a similar way. It’s one of the reasons we have car insurance.

So if you move, or, if you organise the movement of something for someone, and the thing being moved gets lost, damaged or sent to the wrong place, you have a Liability to the party you’re moving it for, because Contract Law says you do.

“I subcontract and use my subcontractor’s insurance so I’m not liable, they are.”

I don’t need to tell you that freight forwarding is not the safest job in the world, and that’s without it turning into “a bad day in Bosnia” as ‘Soap’ from Lock, Stock eloquently states about a different type of job.

If you contract with someone to do something, there is a contractual chain that binds you. Even if someone else is involved in a move, if you have contracted and trusted that party with your customer(s) goods, you have a liability to the party you have moved the goods for. Because contract law says you do.

“Charles why do we have that cage?” Erm, security?

So, you’re in a contractual chain, you have liabilities, how do you mitigate this and protect yourself? Nothing like the way Harry and Barry did with Eddie that’s for sure!

Fortunately, contract law allows you to limit your liability. There are trade associations out there (like BIFA) that can help you with terms and conditions that clarify who you are, what you will do, your obligations, your customers obligations and the law that applies so you can insure your liabilities for what you are moving.

If you don’t have terms and conditions that limit your liability, then the liability incurred under common law is likely going to give you a very bad day because it has NO limitations… and try buying a policy with no limitations (if you can/have please do let me know!).

And this is why you need Freight Liability Insurance.

Which can come with a gold-plated Rolls Royce, as long as you pay for it.

According to Eddie, the entire British Empire was built by cups of tea, so have a brew and read a set of Trading Conditions if you haven’t lately. If you’re involved in moving goods, it’s more than worth your time.

If you have any questions or need assistance, please don’t hesitate to call or email us. We’re here to help.

Thank you for reading… as Big Chris says “It’s been emotional.”…