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Haulage and goods in transit
Freight forwarder liability insurance covers a forwarder's legal liability for goods, errors and resulting financial loss when it arranges or performs transport for customers. It matters because a forwarder can be liable as agent for its own mistakes or as principal for the whole transport chain.
Part of: Haulage insurance
In short
Freight forwarders arrange transport as agents or contract to perform it as principals, and their liability depends on which. Many UK forwarders trade on the BIFA Standard Trading Conditions 2025, valid from 1 January 2026, which limit liability for goods to 2 SDR per kilo of gross weight, cap delay at twice the charges, exclude consequential loss and set a 14 day notice and nine month suit period. Mandatory conventions such as CMR override those terms. Forwarder liability insurance covers goods liability and errors, but it is not cargo insurance for the customer's goods.
A freight forwarder organises the movement of goods for a customer: booking road, sea and air carriers, handling documents and customs, and often warehousing. A carrier physically moves the goods. In law the line is blurred, because a forwarder can act in two capacities.
Which applies depends on the contract, the documents issued and how the forwarder charges. On an international road leg, a forwarder acting as principal may find itself liable under the CMR Convention; see CMR Convention liability.
Many UK forwarders trade on the British International Freight Association's terms. BIFA says its Standard Trading Conditions 2025 are valid for use from 1 January 2026 and are for the exclusive use of current BIFA members. Key clauses in the 2025 text include:
| Clause | Effect |
|---|---|
| 4 | The company may procure services as agent for the customer, and may also act as principal |
| 11(A) | No insurance is arranged for the goods unless the customer gives clear written instructions and the company accepts them |
| 26(A)(i) | Liability for loss of or damage to goods is limited to the lesser of their value or 2 SDR per kilo of gross weight |
| 26(B) | Liability for delay is limited to twice the company's charges for that carriage |
| 26(C) | No liability for loss of profit, revenue, market or use, or consequential loss |
| 27(A) | Claims must be notified within 14 days of the date the customer became, or ought reasonably to have become, aware of the event |
| 27(B)(i) | Suit for loss, damage, misdelivery or delay must be brought within nine months of delivery |
| 2(B) | Where legislation is compulsorily applicable, the conditions are subject to it |
Other claims are subject to separate caps in clause 26, including a 75,000 SDR figure. Read the full text rather than relying on a summary.
Under clause 2(B), compulsory law takes priority over the trading conditions. For international movements the main conventions carry their own limits. BIFA publishes a limits of liability table for the main regimes:
| Mode and regime | Limit |
|---|---|
| Road, CMR | 8.33 SDR per kg |
| Sea, Hague-Visby Rules | 2 SDR per kg or 666.67 SDR per package |
| Air, Montreal Convention | A per kg SDR limit that is revised periodically; check the current figure |
| Air, Warsaw Convention | 17 SDR per kg |
| BIFA STC | 2 SDR per kg |
For road, the 8.33 SDR figure comes from Article 23 of the CMR Convention, given force of law by the Carriage of Goods by Road Act 1965, and it cannot be reduced by contract. A forwarder liable as principal for a CMR leg is unlikely to be able to rely on the lower 2 SDR figure for that leg. Domestic hauliers face a similar question under their own conditions of carriage.
Forwarder liability policies are built around the trading conditions in use. Depending on the wording, cover commonly includes:
Insurers usually expect you to trade on recognised conditions and may restrict cover where you accept higher liability. Logistics consultants who advise rather than handle goods may need professional indemnity insurance instead.
A forwarder's liability policy protects the forwarder. It pays what the forwarder is legally liable for, usually up to the per kilo limits above. A customer wanting the full value of its goods needs cargo insurance, which under clause 11(A) of the BIFA terms the forwarder arranges on written instructions. Explaining that difference to customers prevents disputes after a loss. See marine cargo insurance and our importer and exporter guide.
Illustrative: a forwarder arranges sea freight of machinery parts as agent, with no instruction to insure. The container is damaged at the port. Unless the forwarder made an error, the customer's claim lies mainly against the sea carrier, within the Hague-Visby limits where those rules apply, and without its own cargo cover the customer bears most of the loss.
Forwarders that store goods take on a warehousekeeper's exposure. In Euro Cellular (Distribution) plc v Danzas Ltd [2003] EWHC 3161 (Comm), the defendants traded on BIFA-based terms limiting liability to 2 SDR per kilo. Mobile phones disappeared from a warehouse; the court held that the burden of proving what happened lay on the defendants, found the goods were lost through negligent release, and held them liable in full because that fell outside the limit in their terms.
Storage risks are covered in warehousekeepers' legal liability and warehouse insurance.
Apex arranges haulage and goods in transit cover, including liability cover for forwarders, within its haulage insurance and transport and logistics work. A broker reads each enquiry and comes back with options, with no fee for a quote, and cover is subject to the insurer's acceptance and the policy terms. To quote we need your business activities, turnover, location and claims history, plus the trading conditions you use, the split of agent and principal work, modes and routes, warehousing and the value of goods handled. See also goods in transit insurance.
A carrier physically moves the goods. A freight forwarder arranges their movement, booking carriers, handling documents and customs. A forwarder acting as agent is mainly liable for its own errors; one acting as principal contracts to perform the transport and can be liable for loss anywhere in the chain, as if it were the carrier.
Under clause 26(A)(i) of the BIFA Standard Trading Conditions 2025, liability for loss of or damage to goods is limited to the lesser of their value or 2 SDR per kilo of gross weight. Delay is limited to twice the charges for that carriage, and consequential loss is excluded. Compulsory law such as CMR overrides these limits.
Not automatically. Under clause 11(A) of the BIFA 2025 terms, the forwarder does not arrange insurance unless the customer gives clear written instructions and the forwarder accepts them. The forwarder's own liability insurance protects the forwarder and pays within its contractual limits, not the full value of the goods.
Under the BIFA Standard Trading Conditions 2025, claims must be notified within 14 days of the date the customer became, or ought reasonably to have become, aware of the event, and proceedings for loss, damage, misdelivery or delay must be brought within nine months of delivery. Other trading terms, and mandatory conventions such as CMR, set their own deadlines.
Many forwarders insure errors and omissions within a forwarder liability policy rather than buying separate professional indemnity cover. Businesses that advise on logistics without handling goods or contracting for transport may need standalone professional indemnity insurance instead. The right structure depends on what you actually do.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
