Transportation Concerns and Errors & Omissions for Logistics Professionals

The transportation industry and its professionals are always concerned about the possibility of errors in the performance of their duties. After all, they are vulnerable to financial exposures and more importantly, liability, as a result of the failure to perform their professional services.


By not having the necessary protection in place, even a minor oversight can have a major impact on the operation of the business. As most freight forwarders and customs brokers are aware, they need a policy for errors & omissions for logistics professionals to protect against claims that a client may file against the company. Otherwise, should an employee make a mistake which causes a client to suffer a monetary loss, any legal issue would be extremely costly, and could permanently damage the company’s reputation as well.


Typical exposures associated with transportation of goods


There are quite a few areas where things could go wrong. Here is a list that highlights the most common problems associated with freight and cargo transportation:

  • Lost or stolen cargo, including shipping to an incorrect destination
  • Damage to cargo
  • Delays in shipment or late receipt of cargo caused by negligence
  • Wrongly labeling parties on bill of lading or other documentation errors
  • Failure to exercise reasonable care when arranging storage of merchandise
  • Failure to pay customs charges, resulting in delays
  • Errors in consulting services (e.g. failure to warn of additional fees, duties)
  • Violations of trade restrictions or controls (e.g. shipment of boycotted or prohibited goods)
  • Failure to pay, or misquote of freight charges, and
  • Negligent selection of truckers, to name a few


Primary and excess coverage available


When primary coverage is not sufficient, additional coverage can be purchased to account for higher loss ratios. Coverage is extended to employees while acting within the scope of their employment duties, and may be purchased, where available, for the following exposures:

  • Independent contractor coverage while acting on behalf of the named insured
  • Personal injury coverage
  • Punitive damages coverage
  • Predecessor and successor firm coverage
  • Automatic subsidiary coverage, and
  • Defense costs for disciplinary proceedings, to name a few


Most freight handlers provide services for their customers driven by extensive documentation that requires specific attention. Without the necessary protection of errors & omissions for logistics professionals, even a small oversight or alleged error can have a devastating effect on the business.


photo credit: Maersk Line cc