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Road transport runs on three separate insurances. Carrier liability (OCP) covers the carrier's responsibility for the goods under the CMR Convention, capped at 8.33 SDR per kilogram. Forwarder liability covers mistakes in organising the carriage, not the carriage itself. Cargo insures the value of the goods regardless of fault. "It is insured" does not mean your particular loss will be paid.
Where the illusion that "everything is insured" comes from
"Don't worry, the transport is insured" is said on almost every order. The client hears a promise: if something happens to the goods, I get the value back. That illusion costs the most once the loss has already occurred and the client discovers that the policy he was told about does not respond in his situation, or pays a fraction of the loss.
The trap is that the transport chain carries three independent policies, and each answers a different question. Carrier liability asks: is the carrier responsible, and up to what limit. Forwarder liability asks: did the forwarder make an organising mistake. Cargo does not ask about fault at all; it asks about the value of the goods. The seller assumes that because he handed the goods over, the carrier's policy protects them. The buyer assumes that because he paid for transport, the risk passed to the carrier. Both can be wrong at once, and that is where the gap opens in which nobody pays. We map the split of roles between carrier, forwarder and intermediary in forwarder, carrier, broker: who is liable.
Carrier liability (OCP): responsibility for the goods, but capped
Carrier liability insurance covers the carrier's civil responsibility for damage to the load it carries. The key word is "responsibility": the policy responds only where the carrier is liable for the damage under the CMR Convention. In international carriage, Article 17 CMR makes the carrier liable for loss and damage between taking over and delivery, but the same article relieves it where the damage results from the claimant's fault, an inherent vice of the goods, or circumstances the carrier could not avoid.
Even where liability exists, compensation is limited. Article 23(3) CMR sets the ceiling at 8.33 SDR per kilogram of gross weight short. The SDR is an International Monetary Fund basket of currencies whose rate moves daily. For light but valuable cargo, electronics, cosmetics, spare parts, that cap can cover a tiny share of the real value. We explain the limit mechanism and worked examples in the 8.33 SDR per kilogram limit, and the situations where OCP pays nothing at all in OCP exclusions. The gap between the OCP limit and the full value of the goods is closed only by cargo, which we compare in cargo insurance versus carrier liability.
Forwarder liability: insuring mistakes, not the carriage
Here is the third element, the one talked about least and yet decisive in many disputes. A forwarder, in the classic sense, does not carry the goods; it organises the carriage: it selects the carrier, concludes the contracts, handles documents, plans the route and the customs clearance. Forwarder liability insurance covers its responsibility for mistakes in that organisation, not for the mere fact that the load was damaged in transit.
The distinction is practical. If the goods were destroyed in an accident for which the carrier is responsible, the right insurance is carrier liability, not forwarder liability. Forwarder liability steps in where the loss flows from the forwarder's own failing: it chose an unreliable carrier that turned out to be fictitious and vanished with the load, it planned the customs clearance badly so the goods stalled at the border, it overlooked temperature requirements or passed on wrong instructions. One crucial point: a forwarder that undertook in its own name to deliver the goods is often treated as a carrier and answers under CMR, not as an organiser. The capacity in which the company you hire acts decides which policy protects you, which is why it is worth settling before, not after, the loss.
Cargo: the only insurance that does not ask about fault
Cargo insures the goods themselves, taken out in the owner's interest. It insures nobody's liability, only the value of the property. That is why it responds regardless of whether the carrier or forwarder was at fault, and regardless of the 8.33 SDR limit. It is the only one of the three policies that answers the client's real question, "I want the value of my goods back", rather than "is anyone at fault".
Cargo responds where OCP is silent: damage from causes that relieve the carrier, force majeure, a loss exceeding the weight limit. Its scope is usually broader than the carrier's liability, but not unlimited, insurers exclude, for example, inherent vice, inadequate packing or events outside the transit period, so the policy terms must be read before dispatch, not after the loss. For high-value cargo, cargo insurance is not an add-on but the primary protection that OCP cannot replace.
Who does covers what: the map of three policy?
| Policy | Protects | Covers | When it does not pay |
|---|---|---|---|
| Carrier liability (OCP) | the carrier | liability for the goods under CMR, 8.33 SDR/kg limit | no carrier liability, loss above the limit, exclusions under Articles 17 and 18 CMR |
| Forwarder liability | the forwarder | mistakes in organising the carriage (carrier choice, documents, clearance) | transit damage without a forwarder error, when the forwarder acts as a carrier |
| Cargo | the owner of the goods | the value of the goods themselves, regardless of fault | policy exclusions (inherent vice, bad packing, outside the transit period) |
The typical gap: "it is insured", yet nobody pays
Picture a load of electronics destroyed by an event that relieves the carrier of liability, for example an inherent vice of packing supplied by the sender. Carrier liability: does not pay, because there is no liability. Forwarder liability: does not pay, because the forwarder picked a sound carrier and did nothing wrong. Cargo: was never taken out, because "the transport was insured anyway". The result: the owner of the goods absorbs the entire loss.
A second version of the same trap: the carrier is liable, OCP responds, but it pays 8.33 SDR per kilogram, a fraction of the value of an expensive, light load. The client receives a few percent of what he lost, and only then learns the difference between a liability limit and full value. In both cases the mechanism is identical: someone assumed one policy handled everything. It does not. Three policies answer three different questions, and you have to decide deliberately which risk you close with which of them.
How not to be left with the gap
- Establish who acts as a carrier and who as a forwarder. That decides whether your loss is covered by carrier liability or forwarder liability. The capacity is often different from the company name.
- Check that the carrier holds valid OCP and what its scope is. A certificate alone is not enough: sums, exclusions and covered routes are what matter.
- For valuable or light cargo, buy cargo insurance. The 8.33 SDR per kilogram limit will not cover electronics, cosmetics or spare parts; only cargo closes the gap to full value.
- Consider a declaration of value or special interest in the CMR note. Articles 24 and 26 of the Convention let you raise the carrier's liability ceiling above 8.33 SDR against a surcharge.
- Do not accept "it is insured" without asking "which policy, for what sum, with what exclusions". That is three questions, not one.
The OTSL role
As an international freight forwarder we work in the chain where these three policies overlap, and we spell them out before you sign the order. We select verified carriers with valid OCP, show where their liability ends, and flag when the value of the load calls for cargo insurance rather than reliance on the weight cap. We run traffic between Poland, the United Kingdom, Switzerland and the rest of Europe, with warehouses in Kielce, Legnica and Milton Keynes and with customs clearance. More scenarios sit in our transport risks section and the knowledge base, and you can discuss a specific load through the contact form.
Step by step
- Assess the goods value. Calculate the total value of your cargo relative to its weight to check if convention limits cover potential losses.
- Verify carrier liability coverage. Make sure the road carrier holds an active policy with suitable clauses and paid premiums.
- Review forwarder liability scope. Check that the forwarder is covered for selection errors and proper organisation of carriage.
- Purchase additional Cargo insurance. Take out a property policy if your goods have high unit value or if loss risks exist without carrier fault.
- Report potential damage immediately. Prepare an inspection report upon discovering damage and notify the correct insurer without delay.
Definitions
- OCP (Carrier Civil Liability): A policy protecting the road carrier's assets when legally liable for loss or damage to a consignment.
- Forwarder liability (Freight Forwarder Civil Liability): A policy covering the organiser of transport against financial consequences of errors made during carriage organisation.
- Cargo insurance: Property insurance covering the full value of the goods for their owner regardless of fault.
- CMR Convention: An international agreement regulating legal liability rules and compensation caps in international road freight transport.
- SDR (Special Drawing Rights): An artificial accounting unit used to calculate liability limits per kilogram of damaged goods.
When does this rule not apply?
The standard division of liability does not apply if damage results from gross negligence or wilful misconduct by the carrier. Full protection also fails unless goods are correctly packed and secured prior to loading, or if the loss depends on inherent defects of the cargo.
