What is Cargo Insurance, and Why Does it Matter?
Imagine the following scenario:
You are a seller or buyer of goods, and are at risk for the goods under an Incoterm that places the risk and liability of the goods on you during the transportation. Whether you are receiving or shipping out cargoes, in every step of the way, there may be unavoidable perils, hazards or accidents. The shipping container falls overboard from the vessel. Now the goods are gone, may be the buyer is not going to pay you, or maybe you have already paid for the goods. The carrier or forwarder will only reimburse you according to their legal obligations of liability. At best, you will receive limited recompense for the inventory that is lost or damaged.
This is why you should consider purchasing standalone Marine Cargo All Risks Insurance:
It will cover the cost of lost or damaged goods should an unforeseen event occur during transportation. Similarly, it will protect you from the financial harm of cargo theft or loss in transit. You should always consider purchasing cargo insurance if you are the party at risk under the applicable Incoterm.
Marine cargo all risks insurance policies can be flexible and can provide the following covers:
- All Risks Transit Coverage by Air, Sea and Land
- All Risks Warehousing Coverage
- Door to Door
Here are the Types of Marine Cargo Coverage:
- Single Coverage: Is purchased on a per shipment basis. It covers a single shipment under one Certificate and is the standard form of insurance generally purchased by sellers and buyers.
- Open Coverage: Is purchased where the volumes, numbers and values of shipments are known in advance and where the premiums can be agreed on either on a monthly, half yearly or an annual basis. You pay a lump sum premium at the beginning of the cover based upon the underwriting information submitted to the insurer.
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