As soon as a consignment changes mode of transport, a different liability convention applies, with its own limit, its own burden of proof and its own limitation period.
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In brief
In cross-border carriage it is not one rule that applies but a series. By road the CMR Convention applies, by rail the CIM rules of COTIF, by air the Montreal Convention and by sea the Hague-Visby Rules. Each convention has its own calculation of the maximum compensation and its own period within which you have to protest and issue proceedings. Anyone who brings a claim under the wrong regime is out of time before the conversation begins.
With multimodal carriage that becomes a practical problem. A container unloaded in Rotterdam, taken by rail to Germany and delivered by lorry passes through three regimes. If the damage is only established at the final consignee, it is often no longer possible to say on which leg it arose, and therefore not which limit applies.
A goods in transit insurance cuts straight across those regimes and insures the journey from point of departure to final destination. Against that, international policies have exclusions of their own that domestic carriage does not.
What does international goods in transit cover include?
The structure of the cover in three parts, with an overview per situation below.
The basis
Actual value
What the cargo is actually worth.
Not capped per kilogram
Regardless of who is liable
Including freight and costs
The difference
Liability
What a carrier bears at most.
CMR: 8.33 SDR per kilo
AVC: € 3.40 per kilo
Rarely the actual value
Optional
Type of cover
From limited to all risks.
All external perils
Limited perils
Storage in transit
What is covered
Situation
Carriers' liability
Goods in transit
Damage from an accident, up to the weight limit
Yes
Yes
Damage above the weight limit
No
Yes
Theft of the cargo
Sometimes
Yes
Damage with no identifiable fault
No
Yes
Storage during the journey
No
Sometimes
Inherent defect or inadequate packaging
No
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
A different regime and a different limit for each leg
The conventions do not calculate compensation in the same way. Road carriage works with a limit per kilogram of gross weight, aviation with a unit of its own per kilogram, and sea carriage with a choice between an amount per package and an amount per kilogram. The period within which you have to report damage also differs by convention and is short. Record for each leg who the carrier is and under which document he drives or sails.
With multimodal carriage the place of loss is often unknown
If a container is shipped sealed and only opened at the consignee, all that is established is that the contents are damaged, not where that happened. Without an identifiable leg there is no identifiable regime and no carrier to hold responsible. This is the situation goods insurance is meant for: it does not ask where it went wrong but whether it falls within the cover. Have the container inspected on arrival before the seal is broken.
General average affects undamaged cargo as well
If a master has to jettison cargo in an emergency or have a ship salvaged to save the rest, every cargo interest contributes pro rata to those costs. That is called general average and it applies even where your own container is undamaged. Before the container is released, the shipping line requires security. Goods in transit insurance with general average cover arranges that security. Without that cover you pay yourself before you see your cargo again.
War, strikes and sanctions sit outside the basic cover
Loss caused by acts of war, armed conflict, piracy, strikes and riot is excluded as standard and is only covered through separate war and strikes cover. On top of that, virtually every policy contains a sanctions clause: consignments from, to or via sanctioned countries or parties are not insured, whatever else has been agreed. Customs duties, import levies and fines for incorrect declaration also fall outside the cover.
What does your premium depend on?
Countries and routes. The destination and the countries of transit determine the risk of theft, delay and political disruption.
Mode of carriage and number of transhipment points. Every moment at which the cargo changes vehicle adds a chance of damage.
Nature and value of the goods. What is in the container determines both the size of a loss and how attractive it is.
War and strikes cover. Whether this section is included and the areas for which it applies.
Storage in ports and terminals. Waiting time at a terminal or in a customs warehouse is a separate period of risk and is assessed separately.
Limit per event and per location. The maximum value that can be on one ship, in one train or at one terminal at any one time.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your situation, your risk and your wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
A different convention for each leg, with its own limit and its own time period. If it cannot be established on which part of the journey the damage arose, there is no carrier to hold responsible. Goods in transit insurance covers the whole journey and makes that question unnecessary. That is the main advantage in combined transport.
What is general average and do I have to contribute to it?
General average is the rule that all interests contribute to costs incurred to save ship and cargo together, for example salvage after a grounding. Owners of undamaged cargo contribute as well, pro rata to value. The shipping line holds the container until you provide security. With a goods policy the insurer arranges that.
Are war and strike risks covered?
Not in the basic cover. War, armed conflict, piracy, strikes, riot and terrorism are excluded as standard and call for a separate section. Insurers apply geographical restrictions to it and can adjust those during the term if the situation in a region changes. Check before every consignment to a high-risk area whether the cover still applies at that moment.
Does the policy cover customs duties or fines?
No. Import duties, excise and levies are costs of the commercial transaction and not damage to the cargo. Fines for an incorrect or late declaration are a sanction on your own conduct and therefore cannot be insured. Duties already paid can, however, be included in the sum insured if the goods are lost after clearance.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
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