Cargo liability and insurance glossary

By Erick Plante · Updated 2026-10-16 · Free to read, no sign-up

59 terms used in cargo claims, carrier liability conventions and marine cargo insurance, in plain language. Each entry has its own link (e.g. /learn/glossary/#general-average).

ABCDEFGHIJLMNPRSTWY

A

#Actual total loss

The goods are destroyed, or so damaged that they cease to be the thing insured, or the owner is irretrievably deprived of them. Compare constructive total loss.

#Ad valorem

Latin for "according to value". An ad valorem freight rate or surcharge is charged on the declared value of the goods, usually in exchange for lifting the carrier's standard limit. Learn more →

#Air waybill (AWB)

The transport document for air cargo. Under the Montreal Convention it is evidence of the contract and of receipt of the cargo; it is not a document of title.

#Apparent damage

Loss or damage visible on reasonable inspection at delivery. Most regimes require it to be noted at or immediately after delivery; hidden (non-apparent) damage gets a few more days. Learn more →

#Average adjuster

An independent specialist who collects security, decides which costs count as general average and calculates each party's contribution. Learn more →

B

#Bill of lading (B/L)

The ocean transport document: a receipt for the goods, evidence of the contract of carriage, and (if negotiable) a document of title. The Hague-Visby Rules apply compulsorily to contracts covered by a bill of lading or similar document of title.

#Both to Blame Collision Clause

A bill of lading clause making cargo owners indemnify the carrier in certain collisions where both ships were at fault. ICC (A), (B) and (C) Clause 3 cover the assured's liability under it.

C

#Carmack Amendment

US federal law (49 U.S.C. § 14706 for motor carriers) making carriers liable for actual loss or injury to goods in interstate transport, subject to released rates. Learn more →

#Carrier

The party that contracts to carry the goods. It may be the shipping line, airline, trucker or railway, or a forwarder or NVOCC that contracts as carrier and subcontracts the actual carriage.

#CIM

The Uniform Rules concerning the Contract of International Carriage of Goods by Rail, Appendix B to COTIF. Liability is limited to 17 SDR per kilogram. Learn more →

#Clause paramount

A clause in a bill of lading or charter that incorporates a liability regime (often Hague or Hague-Visby) into the contract, even where it would not apply by law.

#CMR

The 1956 Convention on the Contract for the International Carriage of Goods by Road. Limit 8.33 SDR per kilogram of gross weight short (1978 Protocol). Learn more →

#COGSA

Carriage of Goods by Sea Act. The US COGSA (1936) applies Hague-Rules-style terms with a US$500 per package limit; the UK COGSA 1971 gives the Hague-Visby Rules force of law in the UK. Learn more →

#Consignee

The party named to receive the goods at destination.

#Consignment note

The road (CMR) or rail (CIM) transport document. Under CMR its absence does not affect the validity of the contract (Art. 4).

#Consignor / shipper

The party that contracts with the carrier to ship the goods ("consignor" in air and rail conventions; "shipper" in sea carriage; "sender" in CMR).

#Constructive total loss

Under ICC Clause 13, goods reasonably abandoned because actual total loss appears unavoidable or because recovering, reconditioning and forwarding them would cost more than their value on arrival.

#Container clause

Hague-Visby Art. IV r.5(c): packages enumerated in the bill of lading as packed in a container count as packages for the limit; otherwise the container itself is one package. Learn more →

#Customary freight unit

Under US COGSA, the alternative to "package" for goods not shipped in packages (for example bulk cargo): the unit on which freight is calculated.

D

#Declared value

A value for the goods stated by the shipper on the transport document, which may replace the carrier's standard limit. See also ad valorem. Learn more →

#Delay

Late delivery. CMR and Montreal compensate proven delay losses (CMR caps them at the carriage charges); ICC Clause 4.5 excludes loss caused by delay.

#Deviation

A departure from the agreed or usual route. Under ICC Clause 8.3 cover continues during deviation; under sea carriage law an unjustified deviation can have serious consequences for the carrier's defences.

#Document of title

A document (such as a negotiable bill of lading) whose transfer transfers the right to take delivery of the goods. Sea waybills and air waybills are not documents of title.

#Due diligence

The standard of care an ocean carrier must exercise, before and at the beginning of the voyage, to make the ship seaworthy (Hague-Visby Art. III r.1).

E

#Excess value coverage

A charge offered by some US motor carriers to raise their released-rate liability towards the declared value.

F

#Forwarder (freight forwarder)

A business that arranges carriage. It may act as agent for the shipper or contract as carrier on its own terms; the difference affects who is liable and how much.

G

#General average (GA)

The maritime principle that extraordinary sacrifices or expenditure made for the common safety are shared by all interests in proportion to their saved values (York-Antwerp Rules, Rule A). Learn more →

#General average bond

An undertaking signed by the cargo owner to pay the general average contribution properly due, required (with a guarantee or deposit) before cargo is released. Learn more →

#General average guarantee

A guarantee from the cargo insurer to pay the contribution due, accepted by the adjuster instead of a cash deposit. Learn more →

#Gross weight

The weight of the goods including packaging. CMR, Montreal and Hague-Visby kilo limits refer to gross weight.

H

#Hague Rules

The 1924 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading. Limit £100 per package or unit (gold value). Learn more →

#Hague-Visby Rules

The Hague Rules as amended by the 1968 Visby Protocol (and usually the 1979 SDR Protocol). Limit 666.67 SDR per package or unit or 2 SDR/kg, whichever is higher. Learn more →

#Hamburg Rules

The 1978 UN Convention on the Carriage of Goods by Sea. Limit 835 SDR per package or 2.5 SDR/kg, whichever is higher; 2-year time bar. Learn more →

I

#Inherent vice

A defect or natural tendency of the goods themselves to deteriorate (for example spoilage or spontaneous heating). A defence for carriers and an exclusion in ICC Clause 4.4.

#Institute Cargo Clauses (ICC)

Standard London marine cargo insurance wordings, 1/1/09 edition: (A) all risks, (B) and (C) named perils. Learn more →

#Insurable interest

A legal or financial interest in the goods such that you would suffer from their loss. ICC Clause 11 requires it at the time of the loss.

J

#Jettison

Throwing cargo overboard to save the ship and remaining cargo. A general average sacrifice, covered under ICC (A), (B) and (C).

L

#Limitation of liability

The cap on what a carrier must pay, set by convention or statute, usually per kilogram or per package.

#LTL (less-than-truckload)

Road freight consolidated with other shippers' goods in one truck. In the US, LTL is usually carried under tariff released rates.

M

#Montreal Convention

The 1999 Convention for the Unification of Certain Rules for International Carriage by Air. Cargo limit 26 SDR/kg since 28 December 2024. Learn more →

N

#Nautical fault

The Hague and Hague-Visby defence for loss caused by the act, neglect or default of the master, crew or pilot "in the navigation or in the management of the ship" (Art. IV r.2(a)).

#Notice of claim

Written notice to the carrier of loss, damage or delay within the period the regime sets (for example 14 days for air cargo damage). Learn more →

#NVOCC

Non-vessel-operating common carrier: a US term for a business that issues its own bills of lading as carrier without operating ships.

P

#Package

For limitation, the unit of cargo counted under the package limit. Under Hague-Visby, the items enumerated in the bill of lading; otherwise the container. Learn more →

R

#Released rate

In US transport, a lower freight rate under which the carrier's liability is limited to a declared or agreed value (49 U.S.C. § 14706(c)). Learn more →

#Rotterdam Rules

The 2008 UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea. Not in force: it needs 20 ratifications. Learn more →

S

#Said to contain (STC)

Bill of lading wording showing the carrier did not verify the contents. It can affect how conclusive the stated package count is.

#Salvage

A reward payable to those who voluntarily save maritime property in danger. Separate from general average, though often secured at the same time; covered by ICC Clause 2.

#Sea waybill

A non-negotiable ocean transport document. Not a document of title; the Hague-Visby Rules may still apply if the contract provides for a bill of lading (The Maersk Tangier). Learn more →

#Seaworthiness

The fitness of the ship, crew and cargo spaces for the voyage and cargo. ICC Clause 5 excludes loss from unseaworthiness the assured were privy to.

#Special declaration of interest

Montreal Convention Art. 22(3): a declaration of the consignor's interest in delivery, made when handing over the package and paying any supplementary sum, which replaces the 26 SDR/kg limit.

#Special Drawing Right (SDR)

The IMF's reserve asset and unit of account, valued daily from a basket of USD, EUR, CNY, JPY and GBP. Used to express most cargo liability limits. Learn more →

#Subrogation

An insurer's right, after paying a claim, to step into the assured's shoes and recover from the carrier or other responsible party.

#Survey

An inspection by an independent surveyor to establish the nature, cause and extent of loss or damage.

T

#Time bar

The deadline to start legal proceedings, after which the claim is extinguished or unenforceable: 1 year under Hague-Visby and CMR, 2 years under Montreal and Hamburg. Learn more →

#Transit Clause

ICC Clause 8: "warehouse to warehouse" cover, starting when goods are first moved for loading and ending at the final warehouse or 60 days after discharge at the final port. Learn more →

W

#Warsaw Convention

The 1929 air carriage convention and its amending protocols (The Hague 1955, Montreal Protocol No. 4). Still relevant on routes where Montreal 1999 does not apply. Learn more →

#Wilful misconduct

Intentional wrongdoing or reckless disregard of consequences. Under CMR Art. 29 it removes the carrier's limits and exclusions; ICC Clause 4.1 excludes the assured's own wilful misconduct.

Y

#York-Antwerp Rules (YAR)

The CMI's international rules for adjusting general average, applied by incorporation into the contract. Current version 2016. Learn more →

Definitions summarise the primary sources cited in the linked guides and on our sources page.

General information only, not legal or insurance advice. Limits depend on the contract, the documents issued, declared values, national law and the facts of each case. Check the primary sources and consult a qualified professional before relying on any figure.