Cargo Insurance

Yes, you should consider buying separate insurance. The law doesn’t make the carriers liable for various damages caused to the goods in transit. For instance, carrier insurance does not cover general average and acts of God. Even when they are responsible, their coverage is limited. They are not required to cover standard loss coverage by law. So if you insure your cargo separately, it will protect you from more financial implications that may arise in case of a contingency.

It offers six types:

• Land Insurance: For cargo being transported via land. It covers physical damage due to accidents, theft, and pilferage.
• Marine Insurance: For cargo moving via sea or air, mostly international. It covers all physical damage endured due to poor loading/unloading, piracies, weather fluctuations, accidents, and crashes. Marine insurance offers two types of coverage:
• Open Coverage: Multiple shipments can be covered under a single policy for a certain period, like a year. Open coverage can be renewable, revived after every delivery, or a permanent one that stays active for the duration specified in the contract. It is an ideal insurance plan for those who ship frequently.
• Single Coverage: It covers damages for a particular shipment and is ideal for shippers who move cargo infrequently.
• Contingency Coverage: The consignee often refuses to accept the shipment if it is damaged. This scenario causes many losses to the shipper. Taking the legal route usually proves to be lengthy and costly. A contingency coverage safeguards the shipper from such losses. It is also inexpensive, and the shipper doesn’t need to inform the customer of its application.
• Particular Average: A partial loss sustained by the shipment during transit via sea. The shipper claims partial liability for the loss. It does not include losses incurred and non-delivery due to natural occurrences, wars, weather disturbances, theft, sinking, or collision.
• General Average: It applies only to the cargo movement by sea. If a vessel suffers damage due to occurrences at sea, all cargo owners contribute to cover the loss. Every cargo owner is liable to pay their share even if their shipment survived the damage to the vessel.
• All Risk: It covers most risks except for losses incurred due to natural disturbances, war, customs delays and rejections, handler negligence, and unpaid goods.

Your insurance will not save you from any damage or losses incurred due to:

• Cargo movement using a transport mode other than rail, road, air, or sea.
• Nature of shipment. For instance, hazardous, highly fragile, valuable cargo or certain electronic products.
• Previously flawed products, i.e. goods handed over to the carrier in a damaged condition.
• Improper packaging is done by the shipper causing damage to the goods.