Тrаdіng gооds wоrldwіdе саn bе а соmрlісаtеd busіnеss, the cargo sесtоr іs vіtаl tо thе wоrld’s trаnsроrtаtіоn іndustrу, but іt fасеs ever-changing rіsks thаt nееd tо bе іdеntіfіеd аnd mаnаgеd. Regardless of what kind of shipping method businesses rely on, ensuring it is safe is crucial whether your business is sending a letter across town or a cargo ship across the ocean.Longer trips can expose shipments to greater risks, heightening the need for comprehensive insurance coverage. Thankfully, there are tools at businesses’ disposal.
Marine cargo insurance policies cover goods, freight and other interest against loss or damage to goods whilst being transported by rail, road, sea and/or air while it is in transit between the points of origin and final destination.
If your business imports or exports its products, you’re investing in your company every time you ship cargo. Many businesses don’t protect that investment with cargo insurance but here’s just five of the many reasons why that’s a bad idea.
1 – Reduce exposure to financial loss.
If you’re an exporter who has not been paid for the goods at the time of shipment, or an importer who has paid for all or part of the goods prior to receiving them, you run the risk of suffering a financial loss if the goods are lost or damaged during transit.
2 – General Average – Expedite the release of your cargo.
General Average is an internationally accepted principle where if certain types of accidents occur to the vessel, all parties share in the loss equally. You may be required to post a bond and/or cash deposit in order to obtain release of your cargo following a general average – even though there was no loss or damage to your goods. By purchasing insurance, your insurance company assumes the responsibility and expedites the release of your cargo.
3 – Contractual Requirement
Your sales contract may obligate you to provide ocean cargo insurance to protect the buyer’s interest or their bank’s interest. This is especially true when selling goods CIP or CIF. Failure to do so can not only subject you to financial loss if there is loss or damage to the goods, but also non-compliance with the terms of your contract with the buyer which can lead to loss of sales and legal problems.
4 – Coverage for limited carrier liability
The carriers, by law, are not responsible for many common causes of loss that occur in transit (for example, acts of God, general average, etc.). And, even if they are liable, carriers’ liability in the event of a loss is limited – either by contract in the bill of lading or by law. In most cases, you will only recover cents on the dollar from the carrier.
5 – Have more control over insuring terms
Relying on the buyer’s or seller’s insurance may be a viable option, but you must be satisfied that the insurance has in fact been purchased and that the insuring terms, valuation, and limits provided by each insurer on each shipment are adequate to meet your needs. And, if there is a claim dealing with a foreign insurance company, perhaps in a different language, it can be time consuming and frustrating. If there’s a claims issue, you’re often dealing with courts in a foreign country.
Generally, it is better to have a broker to find the best value for marine cargo insurance because the broker has partnered with a large number of insurance providers. Thus insurance brokers are aware of every minor detail in the process and can add value by providing the best cargo insurance rates in the market while ensuring a trouble free claims process.
We, Ріоnееr Іnsurаnсе Вrоkеrs, have a dedicated tеаm who have ехtеnsіvе knоwlеdgе on marine insurance both for cargo & Hull. We are committed to delivering solutions that will provide suitable cover at an affordable premium. Our Consultants will tаlk уоu thrоugh thе рrосеss іn а lаnguаgе thаt уоu will undеrstаnd.
For more information on our Marine Insurance cover, please don’t hesitate to get in touch.