Am I liable if goods are damaged from a catastrophic loss while in my care, custody or control?

Just as carriers are not liable for “Acts of God,” you should not be held liable even if cargo is damaged because of a catastrophic loss while traveling under your bill of lading or air waybill. Especially if you are storing goods in your own warehouse facility, you do need to act prudently in the event of an incoming storm to protect the cargo. This should be a key risk management component of your business continuity planning.

Such plans should include the steps that must be taken to keep cargo inside a boarded facility and as fully tarped or wrapped as possible. Cargo should not be stored on the floor to avoid potential damage from ensuing floods. Any temperature controlled goods should have backup generators.

Of course, the safety of you and your employees is most important, and your various transportation documents, bills of lading, and warehouse receipts should contain strong Force Majeure clauses that specify you are not liable for acts beyond your control. Maintaining the proper Professional Liability coverage will also ensure you are provided with legal defense if you are sued for any damage to cargo that is caused during a catastrophic loss. Warehouse Legal Liability policies can also be enhanced with Property of Others coverage that can be extended to include hurricane, flood, and earthquake for additional premium and special terms.