PART 2
The Necessity for Every Forwarding Company
In our previous article, “Unlocking Success with Forwarder’s Liability Insurance: Your Journey Starts Here,” we embarked on a journey to explore the world of Forwarder’s Liability Insurance and its pivotal role in the realm of freight forwarding. Today, we plunge further into why this insurance is a must-have for every forwarder. Join the essential journey!
Forwarder’s Liability Insurance isn’t mandatory but is now an industry norm in the dynamic realm of insurance solutions. This coverage demonstrates a company’s readiness to offer restitution to the principal for claims arising from contractual breaches. As forwarding companies engage in a diverse array of activities and services, they naturally enter into different categories of contracts, encompassing:
– Transportation
– Forwarding
– Storage
– Logistical Activities
Highlighting again, the diverse contract nature emphasizes aligning “Forwarder’s Liability” insurance with unique contract conditions for seamless coverage. Moreover, it must also adhere to the conventions and regulations governing the specific contract type. Take, for instance, the scenario of a forwarder entering a road transport contract. Despite subcontracting the actual transportation, the forwarder is regarded as the contracting carrier according to Article 3(2) of the CMR Convention. This implies that for any instances of loss, damage, theft, or delays, the forwarding company bears full responsibility as stipulated by the relevant Convention. The forwarder cannot sidestep accountability by shifting blame to the subcontracted transport. In such situations, the forwarder serves as more than a mere agent or operator. They are the contracting carrier, orchestrating the transportation process and invoicing for their services.
We emphasize this fact and contract type due to a prevalent misconception we’ve encountered. Among 1000+ Bulgarian forwarding companies, a misconception persists: damage blame falls solely on subcontractors, not the forwarder. This notion, however, doesn’t hold true, particularly for the specific contract type mentioned earlier.
Stay tuned for upcoming articles that explore Forwarder’s Liability Insurance intricacies, coverage specifics, and essential insights for navigating forwarding confidently.
*P.S. For those who missed our initial article, catch up here: Unlocking Success with Forwarder’s Liability Insurance: Your Journey Starts Here. Explore our publications for more valuable insights on Transport Liability & Cargo Insurance and the path to success in the world of Logistics.