The CMR consignment note and insurance payout

Does the consignment note matters for the payout of compensation under the carrier’s liability insurance? It often happens that in the event of damage, this question arises during the stage of gathering documents for the insurer. We have previously discussed the CMR consignment note in more detail — its elements, and the responsibility for possible mistakes— in other articles. However, from the carrier’s point of view, one more issue remains important: The CMR consignment note and insurance payout — is the consignment note relevant for receiving compensation under the carrier’s liability insurance ? The Consignment Note and Payout Under Carrier’s Civil Liability Insurance.

To find the answer to the above question, it is necessary to review the general terms and conditions of the insurance. These terms form an integral part of the road carrier liability insurance contract. Although each insurance company has its own conditions, in practice, most insurers condition the provision of insurance coverage and, consequently, the payout of compensation, on the submission of a consignment note containing the carrier’s (insured) details. Sometimes, in addition to the carrier’s information, it is also required that the consignment note includes the carrier’s stamp.

Carriage performed by the carrier’s subcontractors

In practice, it is very common for carriers to subcontract transportation to subcontractors.

In such cases, the consignment note usually contains the details of the carrier actually performing the transport, i.e., the subcontractor. If the conditions of the insurance  stipulate that insurance coverage is limited to transport carried out based on a consignment note issued for the insured, the insurer may refuse to pay compensation if the damage occurs during the carriage performed by the subcontractor, whose details were entered in the consignment note.

Lost consignment note and insurance payout

Sometimes, a situation arises where the CMR consignment note is lost, whether due to theft or unforeseen events such as a fire or flooding of the vehicle. In such cases, there is also the risk of the insurance company refusing to pay compensation. This would occur if the insurance policy limits the scope of coverage to transport carried out based on a consignment note issued to the insured carrier.

Consignment Note Clause

For an additional fee, insurance companies offer the option to extend the carrier’s liability insurance with a so-called consignment note clause. This clause specifies what documents the insured carrier must submit in order to obtain insurance coverage if their details are not included in the consignment note. Such a clause may, for example, require the submission of a consignment note containing the subcontractor’s details and the transport order issued by the carrier to the subcontractor. However, this clause does not necessarily apply solely to transport performed by subcontractors. In some cases, the clause also allows compensation to be paid when the transport is directly performed by the insured carrier, and they present the transport order given to them by the client, or a consignment note, but one that only includes the driver’s signature and the vehicle’s registration numbers.

The use of such solutions by insurers may raise doubts. The CMR Convention explicitly states that the absence or irregularities in the consignment note do not affect the existence or validity of the transport contract. Despite this, the clause is accepted in case law.

It is therefore important to keep this in mind and, before entering into an insurance contract, to review the general terms and conditions of the insurance and consider taking advantage of the additional clauses offered by the insurer. TransportLawFirm.com.

What to do if the consignment note is missing?

If a situation arises where the consignment note is missing and the insurer refuses to pay compensation solely for this reason, it is worth carefully analyzing the case. It may be worth appealing the insurer’s decision. Often, well-chosen arguments can lead to a change in the decision.

Authors: aplikant radcowski Izabela Śmiejczak, adwokat dr Dawid Korczyński PrawnicyTransportu.pl