GlossaryEN1 min readUpdated: Jun 26, 2026
liability limit
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.
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Source: https://www.investopedia.com/terms/l/liability.asp
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Definition & Explanation
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.
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