Did You Know? - Why Should Buy Marine Cargo Insurance (Part 2)
Carrier’s Limit Liability
The International Sea Carriage of Goods Convention (The Hague-Visby Rules) sets the maximum limit of responsibility of the ship owner for loss or damage to cargo. This limit is often calculated based on the value of the lost or damaged cargo.
The following are the maximum reimbursement limits set by The Hague-Visby Rules:
- Maximum Limit on Lost or Damaged Cargo: 666.67 Special Drawing Rights (SDR) per cargo (excluding freight).
- Maximum Limits on Lost or Damaged Cargo at Specific Times and Places: 2 SDR per kilogram or equivalent amount for loss or damage to cargo lost or damaged at a particular time and place.
- Maximum Limit on Delivery Delay: 2 SDR per kilogram or an equivalent amount for late delivery.
It is important to remember that SDR is a unit of value established by the International Monetary Fund (IMF) and its value can fluctuate depending on the values of the major currencies used in the calculation. These provisions are regulated in Chapters IV and V of the Convention on the International Carriage of Goods by Sea (The Hague-Visby Rules).
Please note that countries can adopt The Hague-Visby Rules with some modifications or choose not to apply them. Therefore, checking the legal text applicable in a particular jurisdiction or the contractual documents underlying the cargo shipment can help to obtain the most accurate information in a specific context. Given these maximum reimbursement limitations, cargo owners are often advised to secure their cargo interest to protect the value of their goods beyond the maximum limits set by international conventions or regulations.
Hopefully, the information above can enrich your insight into the carrier limit liability. If you need further explanation regarding the terms and conditions of the policy, please contact us on 021 - 2523110 and we will be happy to assist you.
