# liability limit

*Last updated: 2026-06-26*

> When a cargo claim is filed, the liability limit defines the maximum compensation a carrier or logistics provider must pay, regardless of the actual extent of the loss.

When a cargo claim is filed, the liability limit defines the maximum compensation a carrier or logistics provider must pay, regardless of the actual extent of the loss. The claimant receives whichever is lower: the proven damage or the contractual ceiling. Several international conventions establish standard limits – the CMR Convention, for example, calculates road freight liability on the basis of the gross weight of the goods affected. For high-value shipments, shippers routinely declare the cargo value to negotiate a higher limit, at the cost of an additional freight surcharge. The liability limit should not be confused with the liability threshold: the threshold sets the floor at which a claim becomes eligible; the limit sets the ceiling on what can be recovered.

**Source:** [https://www.investopedia.com/terms/l/liability.asp](https://www.investopedia.com/terms/l/liability.asp)

## Quick Facts

| Property | Value |
|---|---|
| Term | liability limit |
| Language | EN |
| Word count | 122 |
| Last updated | 2026-06-26 |
| Source | https://www.investopedia.com/terms/l/liability.asp |

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