Industry Insights
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Your goods just arrived smashed. The pallet's caved in, product is everywhere, and your customer wants a refund yesterday.
No worries, you think. The carrier will cover it.
It's not usually how it works. Most carriers in Australia and New Zealand structure their contracts so their liability is tightly defined — and in many cases, functionally limited. Shippers who assume carrier liability works like insurance often find out the hard way that it doesn't.
This article is general information only. It does not take into account your personal circumstances. You should read the relevant Product Disclosure Statement, Financial Services Guide and Target Market Determination, and consider whether any product is appropriate for you, before making any decisions.
Here's how carrier liability and freight insurance actually differ in each market, and where the gaps sit.
Carrier liability is the legal responsibility a freight carrier accepts for loss or damage to goods while they're in transit. The legal framework is set by domestic legislation in each market, and for international shipping, by international conventions that influence carrier obligations and limits.
Carrier liability sits separately from cargo insurance. Carrier liability defines what the carrier owes the shipper if something goes wrong under the carrier's contract. Cargo insurance is a policy held by the cargo owner that responds to loss or damage of the goods themselves, regardless of the carrier's contractual position. The two are often confused, but they protect different parties for different things.
The shape of carrier liability is different in Australia and New Zealand — it's worth looking at each.
Most Australian road freight and logistics operators contract on a "not a common carrier" basis. The phrase appears in their terms and conditions, on the back of consignment notes, or in website footers.
A common carrier, at law, is obliged to carry goods for the public and is held to a strict-liability standard for loss or damage. By contracting on a "not a common carrier" basis, a transport company sits outside that strict-liability standard. Its liability is then defined by the terms of its contract — most commonly the consignment note, T&Cs, or a special agreement.
Those contracts often cap liability on a per-kilogram basis, exclude common causes of damage, and impose strict notification windows. Compensation under a carrier's contract is typically capped by weight or shipment units, rather than by the actual value of the goods. For context on a specific contract, shippers should read their carrier's T&Cs directly — the coverage position is often narrower than expected.
In New Zealand, carrier liability is structured by the Contract and Commercial Law Act 2017 (Sections 248–260), which defines four contract types:
The NZD 2,000 cap is the default position under "limited carrier's risk." For goods with a per-unit value above that threshold, the gap between the cap and the replacement value sits with the shipper unless a higher declared value is specified in the contract or separate cover is in place.
In both markets, carrier liability is a contractual position. Where the carrier accepts liability under its contract, payouts are often calculated by weight rather than by the declared value of the goods — meaning reimbursement can be a fraction of actual loss for higher-value freight.
Common exclusions under carrier contracts include:
The takeaway: carrier liability is a contractual allocation of risk. It isn't a risk-transfer product like insurance.
No — they work differently.
Carrier liability is a contractual position defined by the carrier's terms. Whether any amount is payable depends on the contract terms, the burden of proof set by those terms, and any exclusions.
Freight insurance is a risk-transfer product. A premium is paid, and the insurer agrees to cover the declared value of goods against covered events — assessed against the policy terms, not against the carrier's contract.
That's the fundamental difference: a contract-defined liability versus an event-based insurance policy. Carrier liability protects the carrier's contractual position. Cargo insurance covers the owner of the goods.
Freight insurance — sometimes called goods in transit insurance or cargo insurance — covers the declared value of goods against defined covered events during transit. Marine cargo insurance is the term commonly used for cover that responds to goods transported by sea, and is also used more broadly for international consignments. Single transit insurance is structured to cover an individual one-off consignment rather than ongoing shipping activity.
Covered events typically include physical loss or damage during transit, theft, natural disasters, and events such as weather and vehicle or handling accidents. Coverage is subject to the policy terms and exclusions set out in the relevant PDS (Product Disclosure Statement). Standard exclusions commonly include inadequate packaging, inherent vice, and certain goods categories.
Freight insurance products are structured for businesses moving goods through the supply chain. Claims are assessed against the policy terms by the insurer, rather than requiring the shipper to establish fault against the carrier's contract.
Under carrier liability: The contract sets the carrier's exposure. Any claim requires establishing that the loss falls within the scope of the carrier's contract terms. In Australia, coverage is contract-defined under "not a common carrier" terms. In New Zealand, the default cap under "limited carrier's risk" is NZD 2,000 per unit. Acts of God and concealed damage are commonly excluded. Claims timelines vary between carriers and are governed by the contract.
Under freight insurance: The policy covers the cargo owner's interest in the goods. Claims are assessed against the policy terms. Coverage is based on the declared value of the goods, up to the policy's limits, and subject to the exclusions set out in the PDS. The insurer assesses the claim independently of the carrier.
The two products sit beside each other in the supply chain. Carrier liability defines what the carrier may owe under its own contract. Cargo insurance covers the owner of the goods against covered events.
Freight insurance is commonly held by businesses across the supply chain. Common contexts where shippers use freight insurance include:
The factors above are general factors and do not constitute a recommendation. Whether freight insurance is appropriate for a particular business depends on its own circumstances. The relevant PDS should be read in full before any decision is made.
If a carrier claim is declined, the shipper is generally responsible for costs such as replacement of goods, reshipping, customer credit or refund, and the reputational impact of a delayed order. Common grounds for decline include damage not noted on the delivery receipt, packaging or loading issues, events classified within exclusion clauses, and claims filed outside the required notification window.
To file an insurance claim, supporting information typically includes the policy number, the insurer's name, details of the incident, the type of damage or loss, and supporting documentation or photos. Claims handling timeframes and processes vary by insurer and by market — Australia and New Zealand operate under different codes of practice and different external dispute resolution bodies (AFCA in Australia, IFSO in New Zealand). Shippers should refer to their policy documents for the specific claims process and timeframes that apply.
With a freight insurance policy in place, the claim is assessed by the insurer against the policy terms, independently of the carrier's contract position. Cargo insurance products typically respond to physical loss or damage of the goods covered by the policy. Coverage scope and exclusions are set out in the PDS.
FreightInsure is embedded freight insurance — built into the shipping workflow at the point of booking, rather than arranged separately through a broker relationship. Cover is selected per consignment, and premium is charged on a per-shipment basis at the time of booking.
FreightInsure is structured for the freight and logistics sector and is distributed through freight carriers, 3PLs, brokers, and TMS platforms.
In Australia, policies are issued by Assetinsure Pty Ltd (60%) and HDI Global Specialty SE (40%). Cover applies up to AUD 100,000 per domestic consignment and AUD 50,000 per international consignment. FreightInsure has no excess on approved claims, subject to the policy's terms and exclusions. The product is available to Australian entities and residents located in Australia.
In New Zealand, policies are issued by HDI Global Specialty SE (NZ branch). Cover applies up to NZD 100,000 per domestic consignment and NZD 50,000 per international consignment. FreightInsure has no excess on approved claims, subject to the policy's terms and exclusions. The product is available to New Zealand entities and residents located in New Zealand.
For most claims, FreightInsure targets resolution within five business days, subject to receipt of required documentation and the specifics of each claim.
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