Who is Responsible for Goods During Transport? Key Insights for Owners, Freight Forwarders, and Insurers
In cargo transport, one of the most critical aspects is the correct risk management. A frequent question among shippers, freight forwarders, and insurers is: Who assumes responsibility for the goods when the insurance is contracted by the carrier or the freight forwarder? This article answers this question based on the current legal framework in Spain and addresses real situations that can lead to conflict.
Who Assumes Responsibility in Cargo Transport?
Contracting insurance does not automatically transfer liability.
In Spain, the owner of the goods remains the primary financial responsible party, even if the insurance is contracted by the carrier or the freight forwarder. This is because:
Legal liability and insurance coverage are distinct concepts.
Only through a specific contractual agreement (such as Incoterms or a clause in the consignment note) can responsibility be transferred.
Therefore, if the insurance is contracted by a third party without the owner being included as the beneficiary or insured, they might not be covered in the event of a claim.
Consult the Insurance Contract Law (LCS), art. 43 - BOE
Who Collects the Cargo Transport Insurance Indemnity?
It depends on how the policy is drafted. There are two common scenarios:
The owner is included as the insured or beneficiary: they can claim the indemnity directly.
The owner is not mentioned: they could be left unprotected, even if the insurance was contracted "on their behalf."
In practice, many freight forwarders contract insurance as added value to the transport, but if this cost is not reflected and the mandate has not been formalized, legal problems arise.
What Happens If There Is No Explicit Agreement Between the Owner and the Freight Forwarder?
A Realistic Scenario
The freight forwarder contracts damage insurance for the goods.
They do not inform or leave documentation to the owner.
A claim occurs.
The owner's insurer indemnifies them and then exercises the right of subrogation, claiming against the freight forwarder or their insurer.
Result: The freight forwarder could be exposed to liabilities and litigation if their actions were not adequately covered.
More information on subrogation in Article 43 of the LCS
Is This a Case of Double Cargo Transport Insurance?
What is Double Insurance?
According to Article 32 of the LCS, double insurance exists when the same property, risk, and period are covered by more than one policy, in favor of the same beneficiary.
Conditions for Double Insurance in Transport
Both policies cover the same risks (damage in transport).
Both insure the same economic interest (the owner's goods).
Both are for the same period of time.
The beneficiary is the same.
Consequences of Double Insurance
The insured cannot collect twice for the same damage. Instead, the insurers must indemnify in proportion to the sum insured by each one. If one pays the entirety, it can claim against the other.
Practical Example:
Policy A (carrier): €60,000
Policy B (owner): €40,000
Damage: €50,000
Proportional Indemnity:
A: €30,000 (60%)
B: €20,000 (40%)
More information: Article 33 LCS - Proportional Contribution
How to Avoid Legal and Contractual Conflicts?
Best Practices for Owners, Freight Forwarders, and Insurers
Always designate the owner as the beneficiary if the insurance is contracted by a third party.
Formalize the mandate to contract insurance on behalf of another party in writing.
Review the conditions and exclusions of each policy.
Avoid informal or tacit contracting, as it can lead to legal conflicts.
Specialization and Clarity
As we observe, cargo transport does not allow for ambiguities. It is essential that all parties involved (owners, carriers, freight forwarders, and insurers) know their role, rights, and limits.
At Assek Europe, we offer specialized cargo transport insurance with specific coverages and individualized advice, ensuring that the owner is truly protected. Contact our team of specialists.
