Who bears liability for damaged cargo during ocean transport depends on the specific circumstances:
Carrier Liability: If the damage is caused by the carrier’s negligence or improper handling during transportation, such as rough handling during loading and unloading, improper stowage, or unseaworthiness of the vessel, the carrier is generally liable for compensation according to relevant laws and regulations and the transportation contract.
Shipper Liability: If the damage is caused by improper packaging or failure to disclose the special properties or value of the cargo, the shipper may be liable for the loss.
Third-Party Liability: If the damage is caused by the actions of a third party, such as errors by port stevedores or collisions with other vessels, the third party may be held liable. However, in practice, the shipper or consignee may need to first file a claim with the carrier, and then the carrier may seek reimbursement from the third party.
The differences between ocean freight insurance and declared value primarily lie in the following aspects:
Different Purposes: declared value aims to address the issue of the carrier’s limited compensation being insufficient to cover the shipper’s losses, representing a continuation of transportation liability. Insurance, on the other hand, aims to transfer risk from an individual to a community, allowing all members of the community to share the losses and serve as a risk prevention mechanism.
Different Risk Scopes: declared value only applies when the carrier bears unexempt negligence liability, and its coverage is relatively narrow. Insurance, on the other hand, covers losses not only due to the carrier’s liability but also losses caused by various factors, such as third-party tortious acts and force majeure, thus providing a broader scope.
Different Liability Bearers: With declared value, the carrier generally bears the liability for compensation, while with insurance, the insurance company bears the risk of cargo damage.
Different Cost Natures: declared value pays a premium for value preservation surcharge, which effectively constitutes part of logistics costs, while insurance pays the premium and does not constitute logistics costs.
Different Contract Forms: declared value agreements often appear as insurance clauses on logistics documents such as waybills or warehouse receipts; insurance agreements can appear in the form of either insurance clauses or insurance contracts.
Different Claims Procedures: declared value claims are relatively simple and require fewer documents; insurance claims are more complex, requiring submission of claim forms and additional supporting documents to the insurance company.
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