Carrier's Liability Insurance

Carrier's Legal liability insurance came under Tariff, effective from 1st September, 1977. The policy is intended to indemnify the insured against his legal liability (under Carrier's Act, 1965) for actual, physical loss or damage to goods or merchandise caused by fire or accident to the carrying vehicle subject to the terms, conditions and exclusions of the Policy.

The Tariff provides also for wider cover including certain additional risk, e.g. flood, water damage, breakage, leakage, pilferage etc.

Claims are subject to a compulsory excess. A special discount is available if the insured is willing to bear a larger excess.

Premium depends upon the load carrying capacity of the vehicle, type of body, age of the vehicle, limit of indemnity etc. Riot and strike risks can be covered at additional premium.

It should be carefully noted that this insurance should be granted only to transporters of good reputation having a well managed and well organized set up. This insurance should not be given freely.

Prior to underwriting the risk, we should check the following aspects.

• Wording of consignment note used by the carrier should be scrutinized to confirm that proper provision is made for mentioning adequacy of packing, weight of goods etc. It should be ascertained that provisions conferred by legislation are not waived.


• Maintenance of log book for each vehicle since this determines measures of maintenance, condition of each vehicle as well as skill of drivers. This has important bearing on claim.


• Previous claim history.


• Fleet of vehicles, area of operation & nature of goods carried.

Score of cover

• The Basic Cover: The Policy provides indemnity against insured's legal liability for actual physical loss or damages or goods carried caused directly by fire, Explosion and/or accident to the carrying vehicle on account of negligence of the insured and/or negligence/criminal act of insured's servant, subject to vehicle being damaged at the same time due to above causes and claim thereof is admitted under Motor Policy.


• Wilder Cover: In addition to the above basic cover, following risk may be covered to varying extent at the discretion of the insurer:-


• Damage to cargo as in the basic cover in respect of goods carried in hired vehicles.


• Damage by fire, burglary, riot and strike and malicious damage of goods including shortage of contents due to theft and pilferage whilst in warehouses or transshipment yards, in the custody of the carrier.


• Flood or water damage or damage by other cargo.


• Breakage, leakage and damage due to improper handling.


• This wider cover should not be freely given. Aforesaid underwriting guidelines should be carefully followed in consideration of the wider cover.
  
  While wider cover may only be available to some transport operators considered acceptable by the underwriter, the basic cover will be available to the owner or operator of even one vehicle (subject to the proposal being acceptable) and is linked to the vehicle. The basic cover may be given to the chartered of a vehicle where the period of hire is at least 3 months.
  
  Where a transport operator requires cover in respect of vehicles hired by him even for one trip, such cover can be provided under the wide cover described above at the discretion of the insurer.
  
  Provision has not been made for covering theft or pilferage of goods whilst in transfit in the basic cover since the insured is himself in charge of the goods whilst in his vehicle and cover against fire and burglary at goods depot can be taken independently under separate policies in respective branch of insurance. Wider cover is rated at the discretion of the underwriter subject to the condition that the premium charged must not be less than the premium re


• The company will also pay all legal costs and expenses incurred with its written consent in defending any claim made against the insured.


• There is a limit of liability per event and another limit for the entire policy period.


• There is compulsory excess of Rs. 2,000 each accident. Where the insured is willing to carry a deductible of Rs. 5,000/- each accident, a reduction of 10% in the applicable premium rate will be allowed.

Exclusions

• Liability under any contract or agreement unless such liability would have, in any event, arisen under the carrier's Act, 1965.


• Liability for damage to property belonging to the insured or to his servant, agent or sub-contractor.


• Inherent vice and also damage by insects, moth, vermin, mould, mildew, damp, wear and tear, deterioration, spontaneous combustion and decay or perishable goods.


• Depreciation, delay loss of market any confiscation by a public authority.


• Consequential loss arising from loss or damage to goods.


• War and allied perils, act of God, direct or indirect consequence or riots or strikes.


• Nuclear exclusions including radioactive contamination.


• Illicit and illegal contraband or smuggled goods.

Claims

• The insured or his agent should take all necessary steps for the safety of the goods.


• He should take all practicable steps to lead to the discovery of any guilty person.


• He should give notice in writing to the company within 10 days of the happening of the accident. If the Loss or damage is not notified to the company within 10 days of the happening of the event, the company will not be liable for any such loss.


• No admission of liability, offer or promise of payment should be made without prior consent of the company. The company will be entitled, if it so desires, to take over and conduct the defence or settlement of the claim and the insured will be required to co-operate in the conduct of the suit.


• The company may pay the insured to the full extent of its liability under the policy and relinquish the conduct of any defence or proceedings without being held responsible in any way for such action.


• Subject to the foregoing, payment of claims should be made only on the basis of indemnity band only on receipt of a proper discharge signed by the owners of cargo.


• In the event of claim, while one full reinstatement at 100% additional premium is provided under policy conditions, further reinstatements may be granted at a rate of premium to be determined by the underwriter which shall not be less than 100% of the original rate of premium. It should be ensured that the carrier does not change his insurer in mid-term to escape payment of an appropriate additional premium for second or subsequent reinstatements.


• If a payment exceeding the limit of liability has to be made to dispose of a claim, the liability of the Company for any costs and legal expenses as the limit of liability under the Policy bears to the amount paid to dispose of the claim.


• The arbitration condition applies to differences arising as to quantum of the claim, liability being otherwise admitted.


• The time-bar period is 12 months from the date the claim was declined by the insurer, unless a suit is filed in a court of Law.

Other Condition:

• Details of all contracts of carriage issued, freight earned and of all vehicles utilized to discharge such contracts should be properly recorded by the insured and such records should be made available for examination by the company, if required.


• The insured should exercise, reasonable care in employing only steady, sober and competent employees including drivers and upkeep of vehicles, equipment and premises in properly repaired and to be in fit condition.


• The policy shall stand cancelled with immediate effect if:-
  i. the laws relating to carriage of goods are altered;
  ii. any change occurs in the ownership or arrangement of the insured organisation or the area of operation;
  iii. any material change occurs in the information provided in the proposal form.
  


• The insured shall maintain a written record at each of its depots of delivery stations whereunder the conditions and nature of goods received in apparently damaged condition are entered promptly.


• No Marine Open Cover should be issued in the name of transport operators even if the names of the owners of goods are mentioned, where the right of recovery against the carrier is waived at a premium below what will be applicable under this Tariff.