Carriage of Goods by Sea Act (COGSA)
COGSA is a 1936 US federal statute governing carrier liability for cargo loss or damage on international ocean shipments, generally limiting that liability to a fixed amount per package.
Concept
The Carriage of Goods by Sea Act (COGSA) of 1936 is a US federal statute governing the rights and obligations of ocean carriers on international shipments to and from US ports. It is based on the internationally harmonized Hague Rules of 1924 and establishes, in particular, liability exclusions and liability limits in favor of the carrier.
Key Provisions
COGSA contains a statutory list of 17 recognized causes of loss for which the carrier is not liable, provided it can demonstrate that it exercised due diligence to make the vessel seaworthy and to properly handle and stow the cargo. COGSA also generally limits the carrier’s liability to $500 per package or customary freight unit, unless a higher value has been declared in the bill of lading – and in no case can this liability limit exceed the actual loss incurred.
Relevance to Marine Insurance
COGSA is of considerable practical relevance to cargo insurers, since the carrier’s statutory liability limit is typically well below the actual value of the goods, underscoring the need for the cargo interest to arrange independent cargo insurance; COGSA is also frequently the basis for subrogation claims by the cargo insurer against the carrier during claims handling.