Two separate insurances apply to a truck bound for Iran: CMR insurance covers the carrier's liability under the CMR Convention, while cargo (all risks) insurance protects the value of the goods. Iran has been a party to the CMR Convention since 1998; even so, whether the policy covers the Iran route and whether any sanctions restrictions apply should be confirmed in writing with the insurer.
Which insurances are relevant for cargo to Iran?
Two policies are often confused in international road transport. CMR insurance is liability insurance that covers the carrier's legal liability for loss of, damage to or delay of the cargo. Cargo transit insurance, on the other hand, insures the owner's goods directly, up to the sum insured. This distinction does not change on the Iran route; what changes is the geographical scope of the policy and the insurer's acceptance conditions. The general difference is explained in CMR insurance vs cargo insurance.
What is the difference between CMR insurance and cargo insurance?
| Topic | CMR insurance | Cargo (all risks) insurance |
|---|---|---|
| Who is protected | The carrier | The cargo owner |
| Who takes it out | The carrier | The seller or buyer, depending on the terms of sale |
| Basis | Carrier liability under the CMR Convention | Policy conditions and clauses |
| Compensation limit | 8.33 SDR per kilogram of gross weight | The sum insured stated in the policy |
| When nothing is paid | Events for which the carrier is not liable | Risks excluded in the policy |
| Iran route | Depends on the geographical scope of the liability policy | Depends on the insurer's written acceptance |
How does the CMR Convention apply on the Iran lane?
The CMR is the UN convention adopted in Geneva on 19 May 1956 that governs contracts for the international carriage of goods by road; it now has 58 parties. According to the UN list of parties, Turkey acceded in 1995, Iran on 17 September 1998 and Georgia in 1999; Russia has been a party since 1983 and Hungary since 1970. Carrier liability on the Turkey–Iran lane and on both corridors is therefore subject to the same rules. How the limit of 8.33 SDR per kilogram is calculated is explained in the CMR compensation limit.
For high-value cargo, this limit may cover only part of the actual loss. For goods with a high value per kilogram, such as machinery, electronics or spare parts, cargo insurance is therefore considered separately.
Why is the policy confirmed separately for the Iran route?
UN, EU and US (OFAC) sanctions regimes apply to Iran, and insurers and reinsurers usually add a sanctions clause to their policies. These clauses provide that no payment will be made that could breach sanctions. As a result, a policy may not cover Iran, may exclude certain products or may make cover subject to additional approval. Compliance of the cargo, the parties and the payment with these regimes is the responsibility of the shipper and the consignee; a neutral summary is in sanctions responsibility. For a legal assessment, consult the insurer and a specialist adviser.
- whether Iran and the transit countries are expressly included in the policy's geographical scope,
- whether war, strike and confiscation risks are covered separately,
- whether damage occurring while waiting at the border is covered,
- who will carry out the damage survey in Iran when a claim is notified.
When damage occurs, the steps are the same regardless of the country the cargo is in: the situation is noted on the CMR, the insurer is notified without delay and the cargo is not disposed of before a survey has been carried out. The detailed sequence is in what to do after a cargo insurance loss.
Does motor liability insurance or the Green Card cover the cargo?
No. The Green Card is the compulsory third-party liability document for damage the vehicle causes to others abroad; it does not insure the goods being carried. Only CMR liability and a cargo policy respond to loss of or damage to the cargo.
What information is prepared for the policy?
- invoice value and sum insured,
- type of goods, packaging and gross weight,
- loading and delivery points and the route (corridor and border gates),
- terms of sale (Incoterms) and who takes out the insurance,
- consignee and payment details.
For the general scope of cover, see all risks cargo insurance; for the lane itself, see the Turkey–Iran road freight page.