Cargo insurance policies offer you coverage for and protection for your goods which will be transported through various mediums. These cover your shipments in unforeseen circumstances, and hence it is very important for people to insure their goods.
Some of the benefits that cargo insurance provides are:
- Damages due to improper packaging
- Damage caused due to collision
- Employee dishonesty
- Damages due to theft and fire
There are several types of cargo insurance present for the transportation of shipments. These include:
1. All Risk Policy:
This All Risk Policy includes all the damage that is caused to the goods. It includes damage caused due to theft, mishandling of the goods, acts of God such as thunder, lightning as well as accidents and collisions. There are some exclusions present which would be mentioned in your policy.
2. Free of Particular Average (FPA):
Free of Particular Average lists down exactly what is mentioned in the policy. It states very clearly what all will be covered for and what will be excluded from the claim. Usually under this coverage theft is often excluded whereas collisions, accidents, burning and some acts of God are included.
3. Shipment by Shipment:
This coverage is provided by the people who will be shipping your goods. Yet again, there are be some possible exclusions, which may not be taken into account, such as some acts of God and acts of war.
There are three main types of cargo insurance policies. These are open cover cargo policies, specific cargo policies and contingency insurance policy.
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Open cover cargo policies:
The open cover cargo policy is basically when the insurer requires coverage for several various cargo shipments. The open cover cargo policies are renewable and permanent/non-renewable in nature.
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- Renewable open cover cargo policies:
The renewable policy requires to be renewed after a certain period. It reaches its expiration and is not valid anymore. Usually, single consignments fall under this category and require the need to be renewed.
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- Permanent/Non-renewable open cover cargo policies:
This policy is for a longer duration. It is drawn up for a specific time period during which numerous cargo shipments can be sent.
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Specific cargo policy:
When an insurance company insures one particular cargo shipment, it falls under this specific cargo policy.
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Contingency insurance policy:
In some cases, certain customers do not insure their goods. They further do not accept their shipments if they are damaged. This creates a puzzling situation for the seller, and hence they can seek protection through their very own legal system. However, mostly this is of no use. Therefore, they can turn to a contingency insurance policy which has a lower premium rate. Sellers are not even required to tell their customers about it.
Therefore before purchasing your cargo insurance policy from a reputable insurance company in Pakistan, you should decide the type of coverage you want as well as the insurance policy that you want for your shipments.
