As a professional in the river transportYour job is to transport your customers' goods safely. But what happens if, despite all your precautions, the cargo you are transporting suffers damage, loss or is simply damaged while in your care? Your liability as a carrier may be engaged by your customer, the shipper or the consignee. Dealing with these claims can be costly and jeopardise your business. This is where specific, but sometimes misunderstood, insurance comes in: contractual civil liability insurance for inland waterway carriers.
It is essential not to confuse it with your boat's 'body' insurance, which covers damage to your own vessel and a share of the liability for sailing accidents (collisions, strikings). The insurance we are talking about here focuses exclusively on your responsibility towards your customersas set out in the contract of carriage that binds you. When is it compulsory? How does it work with the limitations of liability? What are its exclusions and how do you react in the event of a claim? This article takes a closer look at this insurance, which is vital for securing your business as an inland waterway carrier.
Targeted insurance: responsibility towards the customer
The first thing to understand is the exact scope of this insurance. Its official name is often "Police française d'assurance couvrant la responsabilité du transporteur fluvial". Despite the term "liability", it does not cover not all forms of liability you may incur.
What she coversit's your contractual liability for loss or damage suffered by the goods entrusted to you under a contract of carriage by inland waterway. If the goods arrive damaged or missing, and your liability as carrier is established under the terms of the law or the contract, this insurance will step in to compensate your customer (or reimburse you if you have already paid compensation).
What she does not cover (or only via specific extensions not included in the basic font):
- Your general civil liability or liability in tort Collision: damage that your boat or your activity could cause to third parties (other boats, structures, people on the quayside, accidental pollution, etc.). These risks are covered by "hull" insurance or specific additional clauses (collision, pollution, bodily injury, etc.).
- Damage caused by the goods you transport to other goods or persons.
- Fines, penalties (tax, customs, etc.), seizure or bail fees.
It is therefore an insurance policy that focuses on the carrier-customer contractual relationship and the protection of the goods entrusted to it.
When is this insurance compulsory?
Unlike car insurancecontractual liability insurance for inland waterway carriers is not systematically compulsory in France. Whether or not it is compulsory depends directly on the type of transport contract you are using.
- If you work under a standard contract : Certain standard contracts, approved by decree, make liability insurance compulsory for carriers. This was notably the case for the former "time" and "tonnage" standard contracts of 1999 mentioned in the source document. It is important to check whether the standard contracts you are currently using (or which apply by default in the absence of a written contract) impose this obligation. If they do, you must take out and maintain this insurance.
- If you work with a personalised contract : If you have negotiated and signed a specific transport contract with your customer that deviates from the standard contracts, you are not legally obliged to take out this contractual liability insurance, unless your customised contract explicitly provides for it.
However, even when it is not legally obligatory, taking out this insurance is a good idea. highly recommended. This is because, as a carrier, you are presumed to be responsible for the goods from the time they are taken over until they are delivered (barring exceptions such as force majeure, inherent defect in the goods or fault on the part of the shipper/consignee). Without insurance, you would have to compensate your customer from your own funds in the event of a problem, which can represent considerable sums depending on the value of the goods transported.
How does the guarantee work? The link with your liability
Contractual liability insurance works in close correlation with the liability regime applicable to you as a carrier.
The principle: the insurer pays what you owe
The main idea is simple: the insurer stands in for you to pay the compensation that you would be legally or contractually obliged to pay to your customer following loss of or damage to the goods during transport. The insurer will only pay if your liability is effectively incurred. If you are not responsible (for example, in the case of proven force majeure), the insurer will not intervene.
The amount of compensation paid by the insurer will be calculated on the basis of the material loss actually suffered by the goods, but always within the limits set out in your insurance contract and, above all, within the limits of your own liability.
The importance of limitations of liability
This is an essential point. Transport law, whether through legislation, regulations or standard contracts, very often provides for limitations on the carrier's liability. This means that even if you are liable, the compensation you have to pay is capped at a certain amount per kilogram, tonne or parcel, or at a lump sum.
These legal or contractual limitations also benefits your insurer. The insurer will never pay more than the liability limit applicable to you. For example, if the law or your contract limits your liability to X euros per tonne and the goods were worth much more, the insurer will only pay X euros per tonne, even if the insured value in the liability policy was higher (Note: the precise amounts of these limitations may vary and must be checked according to the texts applicable to your transport).
It is therefore essential to be familiar with the limitations of liability that apply to your transport in order to understand the true extent of your insurance cover.
Declaration of value
What if your customer wants compensation based on the actual value of the goods, which exceeds the standard liability limits? He can make a "declaration of value at the time the contract of carriage is concluded. If you accept this declaration (which generally leads to an increase in the price of transport), you (and therefore potentially your insurer) will be liable for the declared value.
Please note: for your contractual liability insurance to cover this increased liability, you must inform your insurer of this declaration of value before the start of the journey and obtain its agreement. The insurer will generally agree, but will adjust the insurance premium accordingly. Without this prior step, your insurer may refuse to cover the amount exceeding the standard liability limits.
What is excluded from this specific guarantee
Like any insurance policyHowever, cover for the carrier's contractual liability includes exclusions. In addition to the general exclusions (wilful misconduct, war, etc.), there are exclusions specific to this cover:
- Transport without a regular ticket : Transport operations carried out without a valid transport document (consignment note, river bill of lading, etc.) are often excluded.
- Financial losses due to delay : As with cargo insurance, this policy covers damage to materials to the goods, not the purely financial consequences (loss of business, penalties, etc.) resulting from a simple delay in dispatch or delivery.
- Damage caused BY goods : If the cargo you are carrying causes damage (for example, dangerous goods that leak and pollute, or damage the boat or other cargo), this is not covered by this policy. It covers damage to suffered by the goods entrusted to it, not those it cause.
- Fines and penalties : You will be liable for any fines (road, customs, tax, etc.) or contractual penalties.
- Seizures, sureties : The costs of seizing goods or any financial guarantees you may have to provide are not covered.
It is essential to read the general and special terms and conditions of your policy carefully to identify any applicable exclusions.
Key obligations of the insured carrier
For the insurer's cover to continue, you must meet certain obligations in addition to paying the premium. One of the most important for this specific policy is toinform the insurer of the conditions of your transport contracts.
Before the risks begin, and in the event of any subsequent changes, you must provide the insurer with the general and special conditions of the transport contracts that you usually use or that you sign for specific transport operations. The insurer needs to know the legal and contractual framework in which you operate in order to correctly assess the liability risk it is covering. Failure to do so may result in the cancellation or termination of the insurance contract.
Period of cover: during the actual journey
When does cover start and stop? For contractual liability insurance, cover takes effect when you take charge of the goods on board of your boat (which is a later starting point than that of the "store-to-store" facultative insurance). It normally ceases at the time of unloading of the goods at the agreed destination.
However, there is a time limit after arrival: most policies stipulate that the insurance cannot exceed a short period, often eight dayscalculated from the carrier's actual arrival at the end of its journey. If the goods remain on board beyond this period without being unloaded, the carrier's liability insurance cover may cease.
What should you do if a customer claims compensation?
This is the time when insurance must play its part. Your reaction to a customer's claim for loss or damage is crucial to your insurer's handling of the case.
Notify the insurer immediately
You must inform your insurer without delay of any event likely to give rise to a claim, and of any claim actually received from your customer. This information must be confirmed by writes very quickly, often in the 24 hours. This speed is essential to enable the insurer to investigate and take a position.
Do nothing without the insurer's agreement!
This is the golden rule of liability insurance: never acknowledge your responsibilityDo not offer compensation, negotiate, compromise or waive any defence (statute of limitations, limitation of liability, etc.). without the prior, written and formal agreement of your insurer.
Why? Because the insurer has the right to dispute the claim or negotiate on your behalf. Because the insurer has the right to contest the claim or negotiate on your behalf. If you admit liability prematurely, you could deprive them of a defence and they could refuse to cover you. Let your insurer manage the discussion with the customer or his insurer. Your insurer will often take the lead if the case goes to court.
Facilitating expertise and providing information
You must cooperate fully with your insurer or the experts it appoints. This means :
- Contact the insurer or the damage surveyor/expert appointed to organise the damage survey.
- Provide all relevant information on the circumstances of the claim.
- Immediately forward to the insurer all procedural documents, formal notices and summonses served on you.
Payment of compensation: always limited
If your liability is recognised and covered by the policy, the insurer will compensate the customer. However, the amount paid will always be capped by three elements:
- La value of goods as defined in the special terms and conditions of your liability policy.
- Le justified amount of material damage and loss actually suffered by the goods.
- The limits of liability (legal or contractual) that apply to you as a carrier.
The compensation paid will be the lowest of these three limits.
Contractual liability insurance is much more than just a line item in your budget. It's essential protection for your business as an inland waterway carrier against claims from your customers. Make sure that your policy is tailored to the nature of your transport operations, the types of contract you use and the goods you carry.
Contractual liability insurance is a pillar of security for inland waterway carriers. Make sure your policy is tailored to your contracts and the risks involved. Our firm can advise you on the best cover for your business.
Sources
- French Commercial Code (in particular art. L. 133-1 to L. 133-7)
- Decrees on standard river transport contracts (general principles)
- French insurance policy covering inland waterway carrier liability (general principles derived from standard forms)
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