Carrier Liability Limitations
Under COGSA (Carriage of Goods by Sea Act), an ocean carrier's liability is limited to just $500 per customary freight unit. If your $100,000 machine is destroyed, the carrier owes you $500.
Institute Cargo Clauses
- Clause A (All Risk): Widest coverage. Covers all risks of loss or damage, barring specific exclusions (like poor packaging).
- Clause B & C: Named peril policies. Only covers specific events (fire, sinking, collision).
General Average
An ancient maritime law: If a ship faces an emergency (e.g., fire, running aground) and must jettison cargo or hire tugs to save the voyage, all parties (even those whose cargo survived) must split the cost proportionally. Without insurance, your goods will be held hostage until you pay your General Average bond.