Air Cargo Insurance & Carrier Liability Rules

Many shippers assume the airline is fully liable for any cargo damage or loss during transit. However, standard AWB contracts have strict liability limitations, making cargo insurance essential.

Standard AWB Liability Limits

Under international treaties (the Warsaw Convention and the Montreal Convention), airline carrier liability is capped. The Montreal Convention caps liability at 22 SDRs (Special Drawing Rights) per kilogram (approximately $30 USD per kg), regardless of the actual commercial value of the cargo.

This means if high-value electronics or luxury goods are damaged on a carrier like Emirates SkyCargo or Lufthansa Cargo, the standard AWB payout will only cover a fraction of the loss.

Securing All-Risk Cargo Insurance

To secure full coverage, shippers must purchase separate **all-risk cargo insurance**. This covers the full declared commercial value of the cargo against accidents, theft, handling damage, and weather delays throughout the door-to-door transit chain.