Not all shipping desires by sea freight are standard orders that neatly fit into a full container load (FCL) or less than container load (LCL) of a common commercial product. Some orders of shipping can be of unique or highly precious cargo, such as antiques, art, or jewelry. For these orders, one should pay close attention to the liability and trade insurance of the cargo as it is in transport.
For any contract to transport goods there is the carriage of goods by sea act (COGSA), which lays out the legal groundwork for the terms and conditions of any product transported in such a way (livestock is the exception). The basic terms and conditions of the COGSA state that the shipper shall indemnify the carrier against all loss, damages, and expenses that occur while the shipper is carrying the goods. It is also important to note that, in its legal context ‘carriage of goods’ covers the period from the time when the goods are loaded on to the time when they are discharged from the ship.
The above rule affords basic protection of damage of one’s goods while in the shipper’s possession, but there are also many exceptions and limitations to the liability of the shipper that those transporting precious and unique cargo should take particular notice of. Cornell Law provides a full list of Legal Exceptions to Liability that the carrier and the ship have under COGSA
COGSA Legal Exceptions to Liability
- Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship
- Fire, unless caused by the actual fault or privity of the carrier
- Act of God
- Act of war
- Saving or attempting to save life or property at sea
- Insufficiency of packing.” To view an entire list of all the legal exceptions to liability
IQ Global Logistics: Shipping Insurance
With the lengthy list of exceptions allotted to the liability of the carrier and the ship, it is a wise decision to invest in shipping insurance when any precious and unique cargo. There are many various companies that cover sea freight insurance, but for an in depth look into coverage of companies, take a look at securing insurance from IQ Global Logistics Corp. Under IQ Global Logistics Corp policies, if the item is not unique in nature and under the ‘precious’ category, it would be “…automatically covered by a limited policy from the steamship line of up to $500 per shipping unit (each box, carton, skid, crate, etc) with a maximum of $1450 for the entire shipment” The case for securing a quote for a precious or unique piece of cargo, there is not set standard. One must send in the specifics to secure a quote for any item “1) Restricted Commodities, 2) Excluded Countries & Restricted Geographic Areas. 3) Special Risk Commodities and/or value exceeding $50,000.” However, even with insurance there are limitations to what is covered, some of which overlap the exceptions in carrier and ship. There are always risks to moving cargo, and such risks are much greater when the value of the cargo is high, or the object is not easily replaceable. One should make sure to review all the terms and conditions of the contract with both the shipper and insurance before making any definite decisions.
By – Domenic Gabriella for Trade.org