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Prediction: Brazil: Changes in regulation will affect freight insurance costs and premium

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Brazilian freight liability insurance regulation has been consolidated following a number of changes that started in June 2023. In October 2024, the Brazilian regulator enacted Resolution CNSP No. 472/2024, which provides that carriers’ liability insurance should be taken out by one single policy per carrier, extinguishing the possibility of further policies being taken out by cargo owners on behalf of the carrier. Previously, freight liability insurance was compulsory only for damage to cargo by road carriers resulting from collision, fire or explosion of the carrier's vehicle. Cargo owners would therefore purchase cover for disappearance of the cargo by theft or looting under their own insurance and waive subrogation rights against carriers conditional on compliance with risk management requirements. As a result of the new, mandatory freight liability insurance for cargo disappearance, carriers and cargo owners will need to negotiate where the burden lies for the increase in costs on carriers.