Shipments in transit are subjected to numerous perils. Goods may be damaged in a storm or fire, stolen,  involved in a collision or just mishandled. To protect against financial loss, consider Obtaining SEAFAIR’s  Shipper’s Interest Cargo Insurance. In addition to covering loss or damage, our Cargo Insurance also protects against General Average, pays for  the costs to minimize a loss (sue and labor), and pays for damage inspection (survey). Carriers also have  limited liability and are provided legal defenses which absolve them of responsibility entirely. Cargo  Insurance pays covered claims without the need to prove fault. Why not insure?  CARGO INSURANCE  Why Insure?  © 2016 SeaFair Legal/privacy WHAT IS GENERAL AVERAGE?  General Average is a concept incorporated into most ocean bills of lading. It is used when a voluntary  sacrifice is made to save the vessel, cargo or crew from a common peril (e.g., jettison of cargo to extinguish  a fire). If the sacrifice is successful, all parties contribute to the loss based on their cargo’s value. If the  cargo isn’t insured, it won’t be released until the shipper posts a guarantee (cash, bank guarantee or bond).  If the cargo is insured, the insurance company will handle all arrangements on the shipper’s behalf.  HOW ARE CARRIERS LIABLE?  Carriers do not pay claims unless they directly cause or  contribute to the loss. Even when carriers are legally liable  for loss or damage, however, the amount they will pay is  limited based on the mode of transport.  Ocean  The Carriage of Goods by Sea Act (COGSA) governs carrier  liability for goods shipped via ocean to/from the United  States. Recovery is limited to $500 per customary freight  unit, and only when the carrier is negligent. A “freight unit”  can vary from one container to one pallet.  International Air  For air carriers, two liability conventions exist. The Warsaw  Convention limits liability to $9.07 per pound or $20 per  kilogram. The Montreal Convention (used in the United  States), changed this limitation to 19 Special Drawing  Rights (SDRs), or about $30 per kilogram.  Domestic  Many domestic air, intrastate road carriers and warehouse  operators limit their liability to $0.50 per pound or $50 per  shipment, based on their bill of lading or warehouse receipt.  Interstate truckers are governed by the Carmack  Amendment, which dictates full value, but allows for  limitations of liability in bills of lading, tariffs or contracts.  Some carriers will also have inadequate or no liability  insurance and may be unable to fund a loss out of pocket.  CARGO INSURANCE COVERAGE OPTIONS  We can offer comprehensive “All-Risk” coverage for cargo in transit, including Free of Particular Average   and  With Average alternatives.  “All-Risk”: Provides the broadest form of protection available. Goods are covered for loss or damage without  the need to prove liability.  An easy way to remember “All-Risk” coverage is “everything is covered, except what is excluded.” Typical  exclusions include improper packing, inherent vice or rejection of goods by Customs.  Free of Particular Average (FPA): Offers less protection than “All-Risk” coverage, but is a good option for  commodities like used goods, waste materials and scrap metal. A good way to remember FPA coverage is  “the only covered losses are specifically named.” Perils covered under FPA include: sinking, collision, General  Average, fire and washing overboard, to name a few.  With Average (WA): Extends FPA to cover heavy weather. Many shippers choose to add theft, pilferage and  non-delivery to WA and FPA.  DECLARED VALUE vs. CARGO INSURANCE  Declaring value to a carrier is not the same as Cargo Insurance. To claim against a carrier, the shipper must  prove that the cargo was damaged in the carrier’s care, custody or control. The carrier then has multiple  defenses to prove they weren’t liable, which makes recovery difficult. Cargo Insurance provides protection  without having to prove carrier liability. This is particularly important in instances where a loss is attributable  to an “Act of God.” The following sample claims illustrate the difference between declaring value and Cargo  Insurance:  Insurance Certificates:  Certificates of insurances can be issued on request or, if so required, under letter of credit terms.  Please contact us for more information about Cargo Insurance.