A pallet of finished goods comes off the truck crushed. The driver is waiting, your storeman signs, and somebody says it will be fine because everything is insured.
There are usually four insurance policies somewhere around that truck. Three of them will not pay you anything for the crushed pallet. The one that might can be switched off by what happens at your own loading dock in the next thirty seconds.
Before any policy, the carrier is already liable
Insurance sits on top of a liability that exists whether or not anybody bought a policy, and in Thailand that liability is not light.
Section 616 of the Civil and Commercial Code makes the carrier liable for loss, damage or delay of the goods entrusted to him, unless he proves that it was caused by force majeure or by the fault of the sender or consignee. Read the second half twice. You do not have to prove the carrier was careless. The carrier has to prove he was not the cause.
Section 617 extends that to the fault of other carriers, or of anyone he entrusted the goods to. Subcontracting the truck out does not move the exposure away from the company whose name is on your contract. Section 618 makes several carriers jointly liable where more than one moved the goods. Section 621 caps compensation for a late delivery at what a total loss would have been worth, which is the only general limit the Code applies to domestic road carriage.
Two of the exceptions are ones a shipper can walk into by accident.
Section 619, dangerous goods. If the goods are dangerous or likely to injure people or property, the sender must declare that before the contract of carriage is made. Fail to, and the sender is liable for the injury they cause.
Section 620, valuables. For specie, currency notes, bank notes, bills, bonds, shares, debentures, warrants, jewels and other valuables, the carrier is not liable at all unless he is told the nature or the value when the goods are handed over. If a value is declared, his liability is limited to that declared value. Say nothing and the answer is nothing. Declare a low value to keep the price down and you have capped your own claim.
Finally, Section 625: an exemption or limitation of the carrier's liability printed on a receipt or consignment note is void unless the sender expressly accepted it. Small print handed over with the goods does not do the job on its own.
The truck's own insurance is not for your goods
Two motor policies sit on almost every truck on a Thai road. Neither is for the load.
Compulsory motor insurance, the one everybody calls Por Ror Bor, comes from the Protection for Motor Vehicle Victims Act B.E. 2535. Section 4 of that Act defines "Damage" as damage to life, body and health caused by a motor vehicle. Property is not in the definition, because the Act is not about property. It is there so that a person hurt on the road gets treated.
Voluntary motor insurance does cover property, but not yours. In the standard third party liability wording, clause 1.2 pays for damage to a third party's property that the insured is legally responsible for, and then excludes, at (c), baggage or any property brought on to the vehicle, property carried in the vehicle, property being lifted on or off it, and property the vehicle is lifting from one place to another. Exclusion (d) removes property damaged by leakage of chemicals or dangerous substances carried in the vehicle, unless the leak was caused by a vehicle accident.
So a truck carrying a one million baht third party property limit has no cover at all for the pallets on its deck. That limit is for the fence it hits and the car it reverses into. "Is the truck insured?" gets an honest yes and tells you nothing about your goods.
The two products that do cover goods, and why the difference matters
Carrier's liability insurance insures the carrier's own legal exposure under Sections 616 to 618. It responds when the carrier is liable. Which means the moment a flood, a landslide or another genuine force majeure takes your load, the carrier is not liable, the policy is not triggered, and nobody pays you. The assured is the carrier, not you. You are a claimant against a company, and you rank behind whatever else is happening to that company.
Cargo insurance, sometimes sold as goods in transit cover, insures the goods themselves. It responds to the loss rather than to fault. Section 863 sets the condition: a contract of insurance is not binding unless the assured has an interest in the event insured against. Whoever carries the risk of those goods at that moment in the journey is who can insure them, and your sale terms decide who that is.
The difference is not academic. It decides whether an event with no villain in it is your loss or somebody else's. Four questions settle it before you book anything:
- Which of the two policies exists, in those words
- Who is named as the assured on it
- What the sum insured is, and whether it is per vehicle, per event or per year
- Whether it responds when nobody was at fault
The sheet for comparing two freight quotes already has a row for who answers if the goods are damaged. These four answers are what fill it in.
What a goods policy still will not pay
Cargo cover is not a promise to make every bad day disappear, and the limits come from the Code itself.
Section 879 removes two things. The insurer is not liable where the loss was caused by the bad faith or gross negligence of the assured or the beneficiary. And it is not liable for loss resulting directly from the inherent vice of the thing insured, unless the policy says otherwise. Fruit that ripens, steel that develops surface rust in ordinary humidity, a product that degrades over a trip of normal length: that is the goods behaving like themselves, not an accident.
Section 877 sets what gets paid: the actual amount of the loss, valued at the place where and the time when the loss occurred, with the sum insured presumed to be a correct basis for that valuation, and never more than the sum insured. It also covers damage caused by reasonable steps taken to prevent the loss, and reasonable expenses of preserving the property. Two things follow. A policy written at your cost price will not restore the sale you lost. And the money you spend salvaging a damaged load is claimable rather than wasted.
Section 865 makes the contract voidable where the assured knowingly withheld facts that would have led the insurer to charge more or to refuse, or knowingly made false statements about them. That right dies one month after the insurer learns of the ground, or five years after the contract. What you are moving, and how, are exactly the facts this is about.
Section 870 deals with the same goods insured twice. Where the contracts were made simultaneously, the beneficiary can only receive up to the actual loss and each insurer pays in proportion to its sum insured. Where they were made one after another, the first insurer is liable first and the next covers what is left. Insuring goods the carrier has already insured does not get you paid twice. It gets you two premiums.
The clocks end more claims than the exclusions do
Section 623 is the one that catches ordinary, careful companies. The carrier's liability ends when the consignee has accepted the goods without reservation and paid the freight and accessories. The same section then gives two ways out: damage that cannot be seen from the external condition of the goods, provided the carrier is told within eight days of delivery, and cases of fraud or gross negligence by the carrier, where the section does not apply at all.
In judgment 11777/2557, the Supreme Court's intellectual property and international trade division looked at a steel coil trucked from Laem Chabang to a warehouse in Chachoengsao. The consignee's staff had written on the goods receipt that the coil arrived dented from the port. The court held that this note was a reservation, so the carrier's liability had not ended, and that the burden of proving clean acceptance and paid freight sat on the carrier rather than on the claimant. One sentence written by a storeman was the difference between a claim and nothing.
Then the dates:
| What | Section | Clock |
|---|---|---|
| Tell the carrier about hidden damage | 623 | 8 days from delivery |
| Sue the carrier | 624 | 1 year from delivery, or from when delivery should have happened |
| Tell your insurer | 881 | Without delay once you know |
| Claim on the insurance | 882 | 2 years from the date of the loss |
These interlock through Section 880. An insurer who pays is subrogated, up to the amount paid, into the assured's rights against the third party who caused the loss. That is how a cargo claim eventually reaches the carrier. But if your dock signed clean, and nobody said anything for eight days, there are no rights left for the insurer to step into. Insurers know which customers do this well, and it is one of the reasons two buyers are quoted differently for the same cover.
When the road leg is part of an international door-to-door contract
A different Act takes over. The Multimodal Transport Act B.E. 2548 applies where goods move under one contract, by at least two different modes, from a place in one country where the operator takes them in charge to a place designated for delivery in another country. A purely domestic move is not multimodal transport, and stays under the Code sections above.
Where it does apply, the operator's liability is capped. Section 28 sets 666.67 Special Drawing Right per shipping unit, or 2 SDR per kilogram of the gross weight lost or damaged, whichever is higher. Section 30 sets 8.33 SDR per kilogram where the contract includes no carriage by sea or internal waters.
For a 500 kg machine, on weight:
| Contract | Rate | Cap |
|---|---|---|
| Includes a sea leg | 2 SDR/kg | 1,000 SDR |
| Road and air only | 8.33 SDR/kg | 4,165 SDR |
Section 35 converts that to baht at the Bank of Thailand rate prevailing when compensation is calculated. Neither figure is close to what most 500 kg machines cost.
Section 32 gives two ways past the cap. The first is to declare the condition and value of the goods before they are taken in charge and have that written into the multimodal transport bill of lading. The second is loss caused by an act or omission done with intent, or recklessly and knowing the loss would probably follow, which is not something you can plan around. Section 36 also lets the parties simply agree a higher limit than the Act's.
The clock is shorter too. Section 38 bars a claim nine months after delivery or after delivery should have been made, extendable only by the other side's signed written consent and to no more than two years. And Section 39 prohibits operating multimodal transport at all without being a registered multimodal transport operator, which is a registration worth asking to see before the goods move.
What to change on Monday
- Ask which policy exists, in the actual words: carrier's liability, or cargo. Get the certificate and read who the assured is
- Decide who insures the goods, match it to who carries the risk under your sale terms, and write it into the contract
- Declare value for anything on the Section 620 list, and declare dangerous goods before the contract is made, not at the gate
- Give the receiving dock one standing rule: never sign clean when something looks wrong. Write what you can see, on every copy
- Hidden damage goes to the carrier in writing inside eight days
- Diary the one-year date from delivery and the two-year date from the loss
- On door-to-door international moves, check the operator's registration and decide whether declaring value into the bill of lading is worth the freight it adds
None of this is exotic, and none of it is expensive. It is also the part almost nobody checks, which is one more reason two honest quotes for the same run land far apart: a carrier who carries real cover, keeps it current and trains drivers to get damage noted at the door is paying for all of that out of the rate.
Insurance is not a thing you have. It is a chain: a liability that exists, a policy that responds to it, an assured entitled to claim, a note written on a delivery receipt, and a set of dates. It breaks at whichever link nobody checked, and that link is almost never the premium.