When you have products transported, you are at risk. For example, the products may be damaged or lost. With transportation insurance, you cover that risk. The transporting company/forwarder is only liable for damage to goods they transport up to a certain maximum amount. Sometimes a forwarder is not liable for damage at all. For example, when:

• the carrier cannot do anything about it (force majeure)
• you have packed the goods badly
• the goods get lost during transport
• the goods are stolen during transport

Good to know: while cargo insurance protects the sender, freight insurance protects the transporting company.

Agree on the liability

You and your business partner should reach an agreement on who is liable for damages, loss or theft of the goods at each point of the transporting process. For example, when does liability transfer from the seller to the buyer? You can use the ICC Incoterms® standard international delivery conditions. These are standard international terms of delivery. They state when risk passes from seller to buyer.

Do you choose the ICC Incoterms® 2020 CIF (Cost insurance and freight) or CIP (Carriage and insurance paid to)? Then the seller must take out transport insurance.