How Is Your Shipment Insured During Road Transport?

International Road Transport – CMR Convention

International road transport is governed by the CMR Convention (Convention on the Contract for the International Carriage of Goods by Road). Shortly explained, this international agreement outlines the rights and obligations of carriers, shippers, and consignees. One key aspect is the carrier’s maximum liability in the event of damage or loss.

Under the CMR Convention, the carrier is liable for up to 8.33 SDR (Special Drawing Rights) per kilogram of lost or damaged goods. SDR is a monetary unit based on a basket of major world currencies. In practice, this amount equals approximately €10.00 per kilogram.

So, if something goes wrong during international transport and the carrier is found liable, compensation is limited to around €10.00 per kilo—regardless of the actual value of your goods.

Domestic Road Transport – Dutch AVC Conditions

In the Netherlands, AVC conditions (General Transport Conditions) apply to domestic road transport. These also outline the rights and responsibilities of both parties. However, the liability limit is different.

Under AVC, the carrier’s maximum liability is €3.40 per kilogram of lost or damaged goods. Many carriers apply the AVC in addition to the CMR for international shipments, as it provides more detailed terms on certain responsibilities.

Are Your Goods Worth More? Consider Cargo Insurance

If your goods are worth more than the standard liability limits under CMR or AVC, you should seriously consider taking out a separate cargo insurance policy.

Keep in mind: transport liability insurance is not the same as all-risk insurance. Carriers are only required to insure their limited liability—not the full value of your shipment.

Are All Carriers Properly Insured?

Unfortunately, no. At Kuipers Logistics, we always verify the insurance coverage of any subcontracted carriers. We often come across transport companies or freight forwarders that are either underinsured or not insured at all. As such , we refuse to work with them.

For example, some carriers have CMR coverage capped at just €160,000. What if your shipment weighs 24 tons and is worth €220,000? If a loss occurs, the insurer may pay out a maximum of €160,000—leaving you responsible for the remaining €60,000. Good luck trying to recover that from the carrier!

Even worse, some forwarders carry no insurance whatsoever. If damage or loss occurs, it’s up to you to claim compensation directly from the responsible party. That assumes, of course, that they’re insured and willing to cooperate.

Kuipers Logistics Tips

• Always verify whether your carrier or freight forwarder has adequate liability coverage.
• Understand that carrier liability is limited and not all-risk. Check whether the coverage aligns with the actual value of your goods.
• Ask your insurance broker whether a separate cargo insurance policy would add value for your business.
• Make sure the party you’re contracting with is properly insured before placing your order.