Freight Forwarder’s Liability

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Freight forwarders are often called the “Architects of Transport” and may be involved in all kinds of operations and transport as well as ancillary services including issuance of own house bills of lading, which make the forwarder contractual carrier or “NVOC”.

Companies that provide freight forwarding, storage, haulage or logistics services are liable for transport and traffic risks by law, as per the terms and conditions of carriage, international treaties and individual contracts.

Besides representing principals to whom forwarders owe an obligation to act with reasonable skill and care, forwarders may face many other liabilities towards third parties as well as authorities.

The most common risks faced by freight forwarders are:

  • Liability due to loss of, or damage to, cargo
  • Liability due to error and omission
  • Liability to authorities
  • Third party liability
  • Costs and expenses
  • Accidental loss of, or damage to, handling equipment
  • Dishonesty of employees

Most of these risks can be insured under a suitably endorsed Freight Forwarder’s Liability Insurance Policy.