Carriers Liability Insurance
Legal liability cover for goods in your care, custody, and control as a carrier — essential for any operator carrying freight belonging to others.
✓ What It Covers
- ✓Loss of clients' goods in transit
- ✓Damage to freight during transport
- ✓Theft of cargo from vehicle
- ✓Refrigeration failure causing cargo spoilage (with extension)
- ✓Customs duty and freight charges on lost goods
- ✓Livestock mortality in transit (with livestock extension)
✗ What It Excludes
- ✗Inherent vice or defect in the goods
- ✗Inadequate packaging by the freight owner
- ✗Delay (unless specifically included)
- ✗Consequential loss (unless added)
- ✗Nuclear, biological, chemical events
- ✗Deliberate mishandling by driver
When you carry goods belonging to someone else, you take on legal responsibility for those goods. If they are lost, stolen, or damaged while in your care, the freight owner will hold you liable. Carriers liability insurance covers this legal liability — and for any operator carrying third-party freight, it is as essential as the motor vehicle cover itself.
The legal framework
The Contract and Commercial Law Act 2017 (CCLA) governs the liability of carriers in New Zealand. Under CCLA, a carrier operating under a "road carrier's risk" arrangement is strictly liable for loss or damage to goods in transit — meaning you are liable regardless of fault. A "limited carrier's risk" arrangement limits liability to cases where the loss is caused by the carrier's negligence. Your carriers liability policy responds to these legal obligations.
The important point: even under a limited carrier's risk contract, proving that the damage was caused by a weather event (Act of God) or inherent defect in the goods (rather than your negligence) requires you to defend the claim. Legal defence costs alone can be substantial — and they're covered by your carriers liability policy.
What limit do I need?
The appropriate limit depends on the maximum value of freight you carry on any single journey. For general freight operators, $500,000 to $1,000,000 is typical. For operators carrying high-value cargo — retail goods, electronics, pharmaceuticals, livestock — $2,000,000 or more may be appropriate.
Discuss with your broker the highest-value single load you might carry, and ensure your limit is at least 120% of that value (to allow for charges, duties, and settlement costs in addition to the cargo value itself).
Refrigeration failure extension
Standard carriers liability covers physical loss or damage to goods. It does not automatically cover spoilage caused by refrigeration failure — that requires a specific extension. Reefer operators should specifically request this.
Livestock
Standard carriers liability policies are designed for cargo that doesn't die. Live animal transport requires a specific livestock mortality extension that covers animal deaths in transit. See the livestock carrier vehicle type section for more detail.
Dangerous goods
If you carry dangerous goods (HSNO classes), your carriers liability policy must specifically include cover for dangerous goods incidents. Some policies exclude dangerous goods or require a specific endorsement. This is non-negotiable — an undisclosed dangerous goods load that causes an incident, and then a declined claim, is a catastrophic outcome.
Frequently Asked Questions
Do I need carriers liability if I only carry my own goods?
If the goods in your vehicle belong to you (not a client), you don't need carriers liability — you'd simply insure the goods themselves under a goods in transit or material damage policy. Carriers liability is specifically for the legal liability you have to other people's goods in your custody.
What is the difference between carriers liability and goods in transit insurance?
Carriers liability covers your legal liability to the freight owner if their goods are lost or damaged. Goods in transit insurance covers the goods themselves regardless of who is at fault. The freight owner typically carries goods in transit on their own policy; you carry carriers liability to cover your legal exposure to them.
Am I covered if my truck is broken into overnight and the cargo is stolen?
Theft of cargo is a covered event under most carriers liability policies, subject to policy conditions. Conditions may include locked vehicle requirements, secure parking location requirements, and maximum overnight parking periods. Read your policy conditions carefully.
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