Carrier Liability in New Zealand: The $2,000 Question Every Carrier Should Be Able to Answer

Ask a transport company what their fuel bill was last month and you'll get an answer to the cent. Ask about carrier liability in New Zealand, specifically what they're on the hook for when a pallet goes missing, and you’ll get silence.

That isn't a trick question. It's sitting in plain English in the Contract and Commercial Law Act 2017 (COGA), and most carriers running freight in New Zealand have never read the section that answers it.

So here's the number, what it actually covers, and why the gap between the legal answer and the commercial reality is the part that should worry you.

What is carrier liability in New Zealand under COGA?

Unless your contract says otherwise in writing, you default to Limited Carrier's Risk under Part 5, Subpart 1 of the Contract and Commercial Law Act 2017. Section 259 of the Act limits that liability to "$2,000 for each unit of goods lost or damaged," or the amount specified in the contract for a declared value risk arrangement. You can read the full clause on the official legislation site.

No opt-in required. No signature needed. It's simply what applies the moment your contract doesn't specify anything else, and most carriers are running their entire business on this default without ever having chosen it.

Limited Carrier's Risk in New Zealand: the default every contract falls into

COGA only recognises four categories, and your contract is one of them whether you meant it to be or not.

• Declared Value Risk — liable up to a value agreed in writing, with "at declared value risk" specified in the contract
• Owner's Risk — the carrier isn't liable unless the loss or damage is intentional, and only where the correct wording has been signed
• Declared Terms — freely negotiated terms, usually reserved for business-to-business arrangements or unusual cargo
• Limited Carrier's Risk — the default. $2,000 per unit, or actual value, whichever is lower

Three of these require a deliberate, written decision. The fourth just happens.

Why "unit" is the word that decides your claim

This is where carriers get caught out, and it's rarely the headline number that trips them up. It's the definition of a unit.

The Act is specific here too. Each separate item accepted for carriage is a unit, counted as what the first carrier actually accepted, regardless of how it's later packed, repacked, or consolidated. Hand over six boxes and that's six units, even if they're later packed into one container. Seal that container and hand it over as a single item, though, and it becomes one unit. Not six.

At Limited Carrier's Risk, six units is a $12,000 ceiling. One unit is $2,000. Same freight, same journey, and a $10,000 swing depending entirely on how the paperwork described what was handed over and when. If your consignment notes aren't precise about what was accepted, by whom, and in what form, you're leaving that swing to chance.

Correct on paper. Costly in the room.

Here's the uncomfortable part. The $2,000 cap can leave you entirely within your legal rights under New Zealand carrier liability law and still leave you standing across the counter from a customer whose $18,000 shipment just got written down to a fraction of its value.

You didn't do anything wrong. But you'll still lose the account.

Regulation has spent the last few years quietly shifting risk and liability away from consumers and onto the businesses that move their goods. Carriers are the ones caught in the middle: protected by the Act, unprotected from the conversation that follows a claim.

The Act doesn't require insurance. It just expects it.

COGA has never made insurance compulsory for carriers. But in the same subpart that sets the $2,000 cap, the Act's framework assumes carriers will commonly insure their liability when operating at Limited Carrier's Risk, Declared Value Risk, or on Declared Terms.

What sitting on the floor actually costs you

Carrier liability under the Act, on its own:

• Capped at $2,000 per unit under the default position
• No insurance required, though the Act's structure assumes most carriers arrange it anyway
• Every dollar above the cap sits with the carrier, whether that's $500 or $16,000

A Cargo Liability Warranty backing it:

• The carrier is the insured party, not the customer
• Higher-value protection offered to customers at the point of booking
• The exposure above the cap is managed by the policy, not absorbed by the business
• Carriers earn a commercial return on offering it, rather than carrying the cost quietly

Where FreightInsure's Cargo Liability Warranty fits

This is built specifically for carriers sitting on the COGA default, and it changes who carries the risk above $2,000.

The carrier is the insured party. Customers get meaningful protection on the shipments that matter to them, added at the point of booking. The policy behind it manages the carrier's own exposure above the cap, so the gap between "technically covered" and "actually covered" stops being a bet the business makes every day.

It sits alongside your existing carriage terms. It doesn't replace them, and nothing is bundled in without the customer choosing it.

The cap will always be $2,000. Whether that's enough is up to you.

Carrier liability in New Zealand will always start at that same $2,000 floor. COGA gives every carrier a starting point, not a strategy, and the Act will keep doing exactly what it says on the page. What happens above that line, in the conversations with customers whose shipments were worth more than the cap, is a decision every transport business is already making, whether they've noticed or not.

It's worth knowing which decision you're making before a claim makes it for you.

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