Darko Lazarević, Head Of Insurance Technique, Product Development And Underwriting:

Transport Without Risk

Milenijum Insurance offers a range of products for all the needs of clients working in transport and logistics: insurance of goods in transport (CARGO), insurance of civil liability in road transport (CMR), and motor third party liability and Casco motor vehicle insurance.

Full protection of shipments can be achieved through contracting both CMR and CARGO insurance. They are complementary, and their use protects the vendor, the buyer and the transporter, transferring the risk of damaged goods onto the insurance company.
Today’s international trade cannot be imagined without modern tools like the insurance of goods in transport serving as support for the main business activity. This type of insurance provides all participants in international trade with certainty and provides for unfettered everyday business operations, minimizing business risk. There are two different types of insurance – insurance against civil liability in road transport (CMR) and insurance of goods in transport (CARGO).

With CMR, the subject of insurance is a civil liability of road transport providers for proven full or partial physical loss or destruction of items actually received for transport. In practice, this means that the insurance company will reimburse all amounts the insured party must pay as compensation for damage to goods received for international transport for which the transport provider is liable. Transport provider liability is established in accordance with the provisions of the Convention on the Contract for the International Carriage of Goods by Road – CMR.

In order for a transporter to be liable for damage to, or the destruction of goods received for transport and to reimburse the damage to the owner of the goods, the following conditions must be all met:
* That there is full or partial physical loss or destruction of items actually received for transport.

* That the transporter has transported the goods in a manner contrary to the rules of the Convention.

* That the owner of the goods proves that the transporter is responsible for the damage caused.

The subjects of insurance of goods in transport (CARGO) are all items being carried or transported by rail, road, river or lake, aircraft and mail at the risk of the insured party – the owner of goods in international transport.

Insurance of goods in transport covers loss or damage to the insured item due to fire or explosion, traffic or navigational accident of the vehicle or craft, earthquake, flood, avalanche, lightning strike, storm, theft or failure to deliver the entire consignment, or fall of the insured item during loading or unloading from the vehicle. Insurance can also cover risks such as various forms of damage to goods (items) during loading and unloading or due to damage to the packaging, tearing of bags, breakage, spillage or leakage of contents, malfunctions, etc. Insurance coverage also encompasses the costs of saving insured items.

The international rules for interpreting trade terms (INCOTERMS) are the basis for insurance of goods in transport. To apply these rules, the parties to the contract must reference them in their contract, and they apply solely in the relationship between vendor and buyer. Each clause contains detailed provisions on the obligations of the vendor and of the buyer regarding the goods subject to international sales.

With CMR the subject of insurance is the liability of the transporter for damage caused to the goods they received for transport, while for CARGO insurance the subjects of insurance are the goods being transported. There is a subjective element with CMR – a certain degree of guilt by the transporter – and the compliance of their behaviour with the rules of the Convention is assessed, whereas with CARGO insurance this is not the case.

The insurance premium for CMR insurance is lower than for CARGO insurance. This economic factor is often decisive for an owner of goods in not using CARGO insurance, since it increases the total cost of goods, with the owner taking on the risk of destruction of goods. He must be aware of this.

Milenijum Insurance focuses on meeting the requirements of our clients at the highest level, as confirmed by the fact that we are a leader in responsiveness for claims handling.

Full protection of shipments is achieved through contracting both CMR and CARGO insurance. They are complementary, and their use protects both the vendor and buyer (CARGO), and the transporter, transferring through CMR the risk of damage to the received goods onto the insurance company, protecting them from insolvency.

Milenijum Insurance offers a range of products for all the needs of clients working in transport and logistics. Several types of insurance are on offer:

Civil liability insurance for road transport operators (CMR) and insurance of goods in transport (CARGO), offered by Milenijum Insurance with the same success as motor third-party liability and Casco insurance of motor vehicles.

The professional team of Milenijum Insurance is always ready to provide current and potential clients with any and all information, details on the most favourable conditions, and prices of their services.