Estonian transportation companies carry thousands of cargoes on the roads, at the sea and elsewhere on a daily basis. At the same time the sender, recipient as well as carrier of the goods expect the transportation to run smoothly and the transported goods to arrive happily. Unfortunately, the dangers on the road cannot always be foreseen or completely prevented. There is always a possibility that some of the risks associated with the transportation will materialize, in the course of which the transported goods will be damaged. In order to ensure that the person responsible for the transport of the goods does not have to compensate for the damage, it is always reasonable to conclude a cargo insurance, which helps to reduce the risk of damage and destruction of the cargo.

Cargo insurance is a good solution for any company whose daily task is to transport goods from one point to another. In the case of cargo insurance, it is important to remember that the exact scope and volume of the insurance cover can be determined during the negotiations prior to entering into the insurance contract. Cargo insurers usually offer the possibility to obtain various additional protections, which means that the insurance cover includes both the company’s own personal transported goods and the goods that are subject to a purchase and sale transaction, as well as protection of damage to goods during transhipment, damage caused by delay in cargo, etc.

As a rule, cargo insurance is necessary for all companies engaged in transportation but basically also a seller or buyer of goods can conclude a cargo insurance to avoid a situation where both the goods and the money paid / received for the goods are lost. Cargo insurance can be concluded either as an individual policy for a single cargo or for a fixed period (e.g. 1 year).

In the light of the above, it is important to remember that one of the most common grounds for refusing to pay compensation is that the means of transport by which the specific goods were transported does not meet the technical requirements for the transportation of those goods. In order to avoid such a situation, it must be ensured that the goods are always transported in accordance with the conditions laid down for the carriage of the goods in question. In addition, the most important grounds for limiting the liability of an insurer are provided in Art 506 of the Estonian Law of Obligations Act, establishing that generally the damage is not subject to be compensated if it was caused by the carrier, sender or recipient, or if the damage was caused by incorrect packaging or pests.

Although the scope of protection provided by cargo insurance depends on the specific contract and the selected additional protections, the most common examples of damages caused to cargo that have been compensated by cargo insurers are the following:

• robbery
• fire
• traffic accident
• natural disaster, etc.

The insurance policy holder generally has the right to choose whether to insure against all risks or against certain risks.

In conclusion, it is important to remember that in the case of cargo insurance, it is necessary to carefully read the insurance terms and conditions before entering into the contract and, if necessary, ask clarifying questions to conclude a cargo insurance contract that best suits the interest and needs of the policy holder. Careful consideration is required regardless the fact that Art 505 of the Estonian Law of Obligations Act provides that if the risk of transporting goods on land or an internal water body is insured, it is presumed that the insurance covers all risks relating to the goods.

Kardo Karon
Attorney of Law Firm LINDEBERG
Conciliator of the Insurance Conciliation Board and the Motor Insurance Conciliation Board