We all are aware of the fact that the conditions of the ocean are both rough and calm. That is the reason why many freight forwarders believe that the shipments should be properly packed and secured. Due to the unpredictable weather of the sea, the shipments are never free of harm.
Your containers and boxes are properly stacked, you have even distributed the weight right according to the book that you are thinking to give out lessons on how to prepare your shipment. Your shipment is ready to go out in the ocean, and can you now take a sigh of relief?
Importance Of Cargo Insurance:
You can take all the necessary steps to protect your shipment from any damage, but there are always some factors that are out of your control, such as bad weather. Another example is poor packaging of other shipments on the same vessel your cargo is on board. The fire can break out on the vessel and that is why Cargo Insurance is necessary. It is always better to be safe than sorry.
Consider Cargo Insurance as your life or health insurance.
Types of Cargo Insurance:
There are many types of Cargo Insurance to choose from with different limitations and coverages. Below are some common types of Cargo Insurance with their coverages.
- Land Cargo Insurance: As the name clearly states, it covers your cargo when it is being transferred via land. This type of insurance is applied when your cargo is transported on the back of the truck or any other utility vehicle. This type of insurance is domestic, and the coverage is applicable inside the country only.
Coverage: damage from collision, theft, or any other risks.
- Marine Cargo Insurance: This type of insurance covers shipment transported either by air or sea. Marine Cargo Insurance coverage is applicable to international transportation.
Coverage: Damage caused by loading and unloading, piracy, weather conditions, and other relevant risks.
There are two types of Marine Cargo Insurance:
- Renewable Policy: This policy is for those shippers who ship less as it is for one-time transportation and single voyages. This is extremely inexpensive and can save a huge amount of money.
- Permanent Policy: This type of policy is for the shippers who ship frequently. This policy is applied for a specific period of time irrespective of the number of shipments.
Coverage Types:
All cargo types, including water, rail, air, and road, are covered under Cargo Insurance. However, there are a few exceptions to that.
All Risk:
This coverage plan includes protection from all sorts of external factors that your cargo might face. This is most widely used and adopted throughout the world. This is meant for general and approved goods that are most prone to any damage.
What’s Not Covered:
- Any damage that is caused by personal negligence.
- In case your cargo gets rejected by the customs of the locality.
- In case your cargo is abandoned without anyone to handle
Henceforth, getting your cargo insured is the only sane way to prevent the loss of millions in case of any unfortunate mishap or accident.
