“The carrier is liable” is true but incomplete. The extent of that liability is set not by the value of the goods but by a cap laid down in international conventions, and that cap is tied to weight.
Liability and insurance are not the same thing
- The carrier's liability — Arises from the contract of carriage, is capped by convention and is calculated by weight. In some cases — defective packing or force majeure, for instance — it does not arise at all.
- Cargo insurance — A separate contract, and it covers the value of the goods themselves. What exactly is covered depends on the terms, so the policy wording has to be read.
The difference shows most clearly on light but expensive cargo: electronics, precision instruments, medicines. For those, a weight-based cap covers a small part of the actual loss.
When it has to be considered
- the cargo is expensive and the weight is modest
- the route includes transhipment points
- the goods are easily damaged or need a temperature regime
- the delivery term leaves the risk with you
The last point is forgotten most often: the Incoterms rule fixes where risk passes. Under CIF and CIP insurance is the seller's obligation; under the other terms the question stays with you.
Insurance enters the customs value
Insurance costs up to the border may form part of the customs value. Two things follow:
- the cost has to be supported by a document, or the case for the value weakens
- insurance and carriage costs should be shown separately on the invoice
The commonest mistake is folding those costs into a single total without showing them separately. The customs authority then asks for the structure of the value, and clearance stops while the answer is prepared.
What we do
When we build the route we establish in advance where risk sits and with whom, and we check that the insurance document is in a form that can support the value. Send us the type of cargo and the route — we will put together an option under logistics and settle the arguable points in advance under consulting.
Our service on this topic
- Logistics Sea, air, rail and road transport — the optimal route and transparent pricing.
Still have a question?
Get in touch to discuss your specific customs clearance situation — our team will explain it within the framework of the law.
