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Britannia Club: Bills of lading and letters of indemnity

Britannia P&I Club highlighted common problems and best practices for masters regarding bills of lading (B/L) and letters of indemnity in a recent article. The bill of lading (B/L) plays a vital part in shipping goods by sea and serves the following functions: A document of title, providing evidence of ownership of the goods described in the B/L. A receipt for goods received by the carrier. Evidence of the contract of carriage between shipper and carrier. The correct completion and handling of the B/L is imperative to reduce the carrier’s risk of liability for cargo related claims. Common issues 'Clean' bills of lading A master may be requested to sign only ‘clean’ B/L, usually because this is required by a bank in order to extend credit to the buyers of the cargo. Difficulties arise when the goods supplied for carriage are not in the condition described in the B/L. The master should only sign B/Ls that contain an accurate description of the goods and their condition. Issuing an inaccurate B/L may amount to a misrepresentation, possibly rendering the carrier liable for cargo related claims and may prejudice the carriers’ P&I cover. Carriers may consider accepting a letter of indemnity (LOI) ...

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