Cargo Insurance (by ships, aircraft, land vehicles)

In addition, your business will benefit from:

• Protected cash flow from unexpected failures
• Generated profit if included in the coverage
• Professional procedure of claims
• Efficient and simple reporting of losses

When do you need cargo insurance?

Cargo is transported by different people, different trucks and different ports, so you face many risks. There are also external factors such as weather and traffic conditions. Therefore, the longer your cargo is exposed, the more likely it is to be lost, stolen or damaged.

Also note that even if the carrier is legally liable, its limits are usually lower than the price of the goods normally shipped.

Types of cargo insurance

Cargo insurance is generally categorized into land and marine cargo insurance.

Land cargo insurance

This type covers cargo moving overland, such as trucks and light commercial vehicles. It covers theft, collateral damage and other risks associated with land freight transportation.

Marine cargo insurance

This type insures sea and air freight and is mainly used for international shipping. Covers damage caused by loading and unloading, weather conditions, piracy and other hazards faced by ships and aircraft.

Open coverage

It covers shipments for a specified period of time (usually one year) and allows multiple shipments to be included in one policy. For frequent shipments, this is an efficient risk management tool. Also, we can find two types of open coverage:

• Renewable. Good for single trips and trips as the policy can be updated after the package has been delivered.
• Permanent. This policy is applicable for a specific period of time and allows unlimited shipments within that period.

Single coverage

Also known as a specific insurance policy, it covers freight per shipment and is ideal for businesses that ship infrequently.

All Risk

This type covers most causes of damaged or lost shipments when the goods are new and inherently not susceptible to breakage, damage or loss.

However, the following causes are not included:

• Damage or loss due to force majeure (natural disasters, etc.)
• Loss or damage due to war, strikes, riots, or civil unrest (WSRCC)
• Importer/exporter negligence
• Customs delays and refusals
• Goods which are unpaid, regardless of whether the customer does not pay or the seller does not collect payment

What does cargo insurance not cover?

Cargo insurance does not cover risks or problems within the shipper's control. It's important to keep this in mind to reduce the chances of your package being damaged or lost.

In general, the policy excludes:

• Damage caused by improper packaging. The policy does not cover you if the damage to the goods is the result of improper packaging of the shipment.
• Damage due to defective products. Your policy won’t refund you if the carrier can show that the damage was caused by a defective item in the shipment.
• Certain types of cargo. Some insurance companies do not cover dangerous goods, certain electronic products, and other very valuable or fragile products.
• Some modes of transportation. Some policies may only cover cargo on board a ship, plane, or truck.