Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

Why might an owner decide to use a Released Bill of Lading?

1. The property value is less than the tariff value

2. The owner wants maximum insurance coverage

3. The shipment has a higher value than a standard tariff

4. The owner has no intention to insure property at all

The correct answer is: The property value is less than the tariff value

A Released Bill of Lading is often used when the owner of the goods decides not to declare the full value of the cargo. This can be beneficial when the property value is less than the tariff value, as it allows the owner to pay a reduced rate for their insurance and transportation. By using this type of bill of lading, the owner acknowledges that the carrier's liability is limited to the lower declared value, which aligns with the cost of insuring items that are not as valuable. In situations where the actual value of the goods is lower than what would typically be assessed under tariff assessments, this choice minimizes costs while still providing a mechanism for transporting goods. Owners may opt for a Released Bill of Lading to save on premiums and ensure that operational costs remain manageable within their budget. Additionally, this choice is aligned with practical risk management, as it reflects the true value of what is being shipped.