Freight Forwarders’ Legal Liability Insurance in the UAE

Freight Forwarders’ Legal Liability Insurance may cover a freight forwarder’s applicable legal liability arising from declared freight, logistics and transport services. It may respond when cargo belonging to a customer is lost or damaged while under the insured’s care, custody or control, subject to the issued policy wording, limits, deductibles, conditions and exclusions.

This policy is different from Marine Cargo Insurance. Cargo Insurance generally protects the insured goods against covered physical loss or damage. Freight Forwarders’ Legal Liability Insurance generally responds only when the freight forwarder has an applicable legal liability for the loss.

Who May Need This Insurance?

The policy may be relevant to businesses such as:

1. Freight forwarders
2. Freight-terminal operators
3. Non-vessel-operating carriers
4. Road-haulage operators
5. Parcel carriers and courier businesses
6. Multimodal transport and logistics operators

Cover may depend on whether the insured acts as an agent, contractual carrier, principal, warehouse operator or another type of logistics provider. All declared activities and contractual responsibilities should therefore be accurately disclosed.

What the Policy May Cover

Depending on the issued terms, cover may include liability for:

1. Cargo loss or damage: Applicable legal liability for accidental loss of or physical damage to customers’ cargo.
2. Containers and transport equipment: Liability for accidental damage to containers, trailers, vehicles or other equipment belonging to another party.
3. Third-party liability: Applicable liability for accidental bodily injury or property damage arising from insured operations.
4. Errors and omissions: Specified liability arising from negligent documentation, routing or operational errors, when expressly included.
5. Legal defence costs: Eligible costs incurred in defending an insured claim with the insurer’s prior consent.

Liability for delay, misdelivery, customs errors, contractual penalties or consequential financial loss is not automatically covered. These exposures must be expressly included where available.

Important Policy Conditions

1. Declared services: Freight modes, cargo types, storage activities, territories and annual turnover should be accurately stated.
2. Trading conditions: The insured should use appropriate contracts, bills of lading and standard trading conditions.
3. Subcontractors: Carriers, warehouse operators and other subcontractors should be selected and managed with reasonable care.
4. Cargo restrictions: High-value, hazardous, temperature-sensitive or specially regulated cargo should be separately declared.
5. Territorial limits: Operations should remain within the geographical scope stated in the policy.
6. Material changes: Changes to activities, turnover, cargo, contracts or operating territories should be disclosed.

Common Exclusions and Limitations

The policy may exclude or restrict:

1. Loss where the insured has no applicable legal liability.
2. Liability accepted solely under a contract beyond the liability that would otherwise apply.
3. Deliberate acts, dishonesty, fraud or wilful misconduct.
4. Unexplained disappearance or inventory shortages.
5. Delay, loss of market, loss of profit and contractual penalties unless expressly included.
6. Damage to property owned by the insured.
7. Cyber incidents, data loss or unauthorised system access.
8. War, sanctions and other excluded events stated in the policy.

What to Do After an Incident

1. Take reasonable steps to protect the cargo and prevent further loss.
2. Notify Al Buhaira Insurance as soon as reasonably possible.
3. Notify the responsible carrier, warehouse or subcontractor within the required period.
4. Preserve recovery rights against responsible third parties.
5. Keep transport documents, photographs, survey reports and correspondence.
6. Do not admit liability or settle the claim without prior approval.

How to Request a Quotation

Businesses can submit initial information through Al Buhaira Insurance’s dedicated Freight Forwarders’ Legal Liability quotation page. The assessment may consider annual turnover, cargo types, transport modes, territories, contracts, subcontractors, storage activities, requested liability limits and claims history.

A quotation does not confirm that insurance has started. Cover begins only after the information has been reviewed, the offered terms have been accepted and the applicable policy documents have been issued.

Documents Required

The insurer may request documents and information such as:

1. Completed proposal or quotation form
2. Trade licence and company details
3. Description of freight and logistics services
4. Annual turnover and shipment volumes
5. Cargo types and maximum cargo values
6. Transport modes and operating territories
7. Standard trading conditions and customer contracts
8. Bills of lading or transport documents
9. Carrier, warehouse and subcontractor agreements
10. Security and cargo-handling procedures
11. Required liability limits and extensions
12. Previous insurance details and claims history

Why Choose Al Buhaira Insurance?

1. Marine liability product: Freight Forwarders’ Legal Liability Insurance is available within Al Buhaira Insurance’s marine insurance range.
2. Dedicated quotation page: Businesses can submit initial freight and logistics details online.
3. Operational assessment: Quotations can consider the declared services, cargo, turnover, territories and requested limits.
4. Policy and claims enquiries: Customers can contact Al Buhaira Insurance regarding issued terms or an incident under an existing policy.

Frequently Asked Questions