Cargo insurance

Risks of transport

Understanding Liability, Claims and why Insurance is so important. 

DSV provided his clients a guideline to understand cargo insurance liability. The following information can be viewed as a helpful tool to better understand limited liabilities, carrier defences, protection against losses and interests.

In international trade the liability of carriers (airlines, shipping lines, freight forwarders) is limited by law. Possible compensation is not calculated on basis of the commercial value. Moreover many shippers are not aware of the various exclusions of responsibility. DSV believes it makes good business sense to educate our customers about our liabilities, what they can do to protect themselves against loss and damage and how to properly handle claims if an exception occurs.

The supply chain

Each supply chain is different. An account’s economic requirements may cause an even greater variance in the transportation solutions provided. For instance, your cargo may originate at a third party supplier, who hands your shipment off to a trucker who delivers it to a warehouse. There it is either consolidated or handed off to another trucker to bring it to a gateway where your cargo is consolidated and then trucked to a railhead, pier or airport. From there it may be handed off to another trucker before it leaves the country for international transport. Once the cargo arrives at the country of import, the process begins again in reverse until it is delivered to your final customer.

Now to complicate matters, imagine each country that your cargo travels through, has security interests that may select your shipment for a custom’s inspection. One advantage in using DSV is that we have our own operations in over 60 countries. This means DSV has its own offices and personnel including DSV warehouses and DSV trucks in many countries. We have an IT network to track your shipments and maintain the integrity of your cargo.

Limited Liabilities

Carriers, forwarders, brokers, warehousemen, truckers and logistic providers have limited liabilities.

Road Freight: DSV Belgium’s liability is governed by the CMR Convention which is compulsory applicable on international road transport, limiting the carrier’s liability to 8,33 Special Drawing Rights (SDR) per kilogram. The SDR is a fluctuating international currency unit. It can be determined at the International Monetary Fund (IMF) website at

Ocean Freight: The Hague/Visby Convention will apply, limiting a carrier’s liability to 2 SDR per kilo or 666.67 SDR per collo (whichever is highest). A carrier’s liability for cargo to and from the United States is limited under the Carriage of Goods by Sea Act or COGSA. COGSA states that if liability is proven to be that of the carrier, the liability will be limited to $500 per package or customary freight unit.

Air Freight: As an air freight forwarder, DSV’s liability is 19 SDR per kilo as per Warsaw Convention.

Carrier’s Defences

In addition to limiting liabilities, a carrier by law is permitted certain defences known as the 17 Hague Defences. Neither carrier nor the vessel shall be held responsible for loss or damage resulting from:
  1. Act of neglect, or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship.
  2. Fire, unless caused by the actual fault of the carrier.
  3. Perils, dangers and accidents of the sea or other navigable waters.
  4. Acts of God.
  5. Acts of war.
  6. Acts of public enemies.
  7. Arrest or restraint of princes, rulers, or people or seizure under legal process.
  8. Quarantine restrictions.
  9. Act or omission of the shipper or owner of the goods, his agent or representative.
  10. Strikes, lockouts, stoppage or restraint of labour from whatever cause.
  11. Riots or civil commotions.
  12. Saving or attempting to save life or property at sea.
  13. Inherent vice, defect or quality of the goods.
  14. Insufficiency of packaging.
  15. Insufficiency or inadequacy of marks.
  16. Latent defects not discoverable by due diligence.
  17. Any other cause arising without the actual fault and privity of the carrier, their agents and servants.

Protection against losses

So how does a cargo owner protect themselves and their cargo against physical and financial loss?


There are many ways to prevent and deter loss or damage to cargo. Being savvy with knowing your risks and taking steps to minimize them is a good place to start.

Here are some ways to do this:


Although we take the utmost care in handling your cargo, DSV recommends full insurance of your cargo through DSV Cargo Insurance. Our volume allows us to offer competitive insurance rates.

DSV Cargo Insurance protects you against the financial risks and time consuming processes if an unforeseen event occurs. If the cargo is damaged or lost, the insured customer will be compensated for the loss.

DSV handles all cargo with personal and professional care, but we are also aware of the risks of transportation. Our goal is not only to offer the best transport solutions, but also to consider unforeseen events. We therefore offer cargo insurance through DSV Cargo Insurance. Customers can insure all shipments with full cover from pick-up to delivery.

Premium rates are fixed and based on the category of goods, destination and the value of the cargo including 10% imaginary profit. Freight charges can be included when specified. Please see our matrix below for current premium rates.

Reliable contractors

Although carriers have limited liabilities, the bills of lading are not worth anything if the carrier does not have the insurance coverage to back it up. Request a carrier’s proof of insurance. Also contractors with comprehensive worldwide networks have additional security measures and procedures to keep cargo safe and intact. DSV has proper liability insurance coverage. Contact your DSV representative for a copy of our insurance certificate.

Prepare shipments for export

It is the responsibility of the shipper to ensure that their cargo is prepared for the vigour of international transport. There are too many variables to list and each customer’s product is different but sometimes common sense is enough to prevent loss or damage. i.e. Use rigid corrugated packaging, use polystyrene foam inner packaging or other foam or paper packaging products to prevent breakage; do not over stack pallets; use airbags or proper blocking and bracing for full containers and, if you’re the importer, ensure you provide written instruction to your supplier to properly pack, mark and label cargo. Please see this helpful link
  • If you have a name brand or high value cargo subject to pilferage, do not advertise your product on the exterior packing. Use non-descript exterior packaging so not to draw any undue attention to your shipment. Additionally, make sure that all cartons are properly marked and labelled to ensure that all cartons are identified if they are separated. Remember a port’s security procedure may require cartons to be open and inspected which may separate palletized cartons. It is not sufficient to only label the pallet; each carton should be labelled with a shipping and a destination address.
  • Know your contract terms: Make sure your Incoterms or shipping terms are agreed to in writing prior to transporting your cargo. Knowing your terms will dictate who is responsible for what and can save a headache in the long term.
  • Inspection of Cargo: It is a consignee’s responsibility to make a visual inspection of cargo upon receipt to determine if there are any visible signs of loss, damage or tampering. Making the proper notation on cargo receipts and getting a signature from the delivering carrier is essential to protect your interests and to file a claim. If you have a digital camera available in the cargo receiving area or if packing a container, take photos of the loading or unloading process. As they say, “a picture’s worth a thousand words”.
  • Talk to your insurance company to see if they have the proper coverage for transporting or storing your cargo. Many times people are unaware as to whether their policies cover transportation and if so, whether deductibles apply. If cargo losses are not covered or available under your existing policy, speak to your DSV representative and they can offer you a variety of insuring options. However, this also ties into knowing your contract terms, as it may not be your responsibility to procure insurance.
  • Issue written instructions: In all cases, make sure you convey your intentions, instructions and understandings in writing. Requests for insurance must be in writing. There is nothing worse than getting into a “he said – she said” situation because all instructions were verbal.


This topic warrants its own bullet point as insuring terms can be confusing and misleading. An educated customer will know the risks and benefits of insurance and also understand that there are responsibilities and steps that must be followed to ensure a policy pays for loss or damage. Customers should be aware of the different insuring terms available and make a risk analysis to make sure the most cost effective terms are procured.

All Risk Coverage: This is the broadest coverage you can request but the term is also misleading. All Risk does not entitle you to uncontested payment. See below ‘Exceptions and Exclusions’ on when insurance may not pay a claim.

The terms and conditions of all risk coverage are referred to as the Institute Cargo Clause 2009 (ICC) A, a copy of which is available upon request.

Exceptions and Exclusions: Cargo interest must be aware that any of the following situations may constitute a denial of a claim. Following are exceptions and exclusions which may apply and provided as a reason not to pay a claim.

Notice for loss or damage in a timely manner

Road Freight: Receipts must indicate damage or exception. And a written claim should follow within seven days

Ocean Freight: Receipts must indicate damage or exception. And a written claim should follow within three days.

Air Freight: Visual Damage – Receipts must indicate damage or exception (i.e. crushed boxes, rips, bent corners, etc), and a written claim must follow within seven days.



MCI Brokers nv is an insurance broker authorized by the Belgian FSMA under license number 109018A. The liability of MCI Brokers nv is limited to the amount paid out by its professional liability insurance.
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