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Airlines, freight forwarders and other supply-chain parties operate under limited liability conditions. This means you're unlikely to receive compensation equal to the actual value of your goods if they're lost or damaged. The full replacement value for consignments and any applicable freight costs should therefore be protected by adequate insurance cover.

However, insurance cover doesn't normally extend to protecting consequential loss. An example of this is where a consignment is delayed en route so that, on arrival at the destination, a financial loss is incurred due to the delay. Check with insurers before goods are shipped to see if you need this type of cover.

Make sure your consignments are adequately insured. Consider if they are subject to risks and choose insurance to cover these. It's advisable to consult a broker or freight forwarder for guidance. Unlike other modes of transport, airfreight insurance is with the freight forwarder, not the carrier.

Consult a broker or freight forwarder for advice - see our guide on transport insurance.

The Financial Services Authority (FSA) regulates businesses and brokers - including freight forwarders - providing insurance brokerage services. It does this through the Insurance Mediation Directive. Not all freight forwarders are FSA registered so may be unable to provide insurance services.

The Warsaw and Montreal Conventions

These conventions govern the international carriage of goods by air. They cover:

• the carrier's responsibilities
• basis of carrier liability
• financial liability limits
• carrier's responsibility for sub-contractors
• documentary requirements
• consignor's liabilities
• special provision regarding dangerous goods
• claim time limits and limitation periods

Conventions apply to the issuing of the air waybill (the legal evidence of your contract agreement with the airline). Under the Convention you or your agent must complete an air waybill for each airfreight shipment.