Cargo Insurance: Protecting Your Investment

Cargo Insurance is often overlooked, but its significance cannot be underestimated. In international shipping, where damages and losses are common, having cargo insurance is a crucial step to safeguard your investment. Unlike health or auto insurance, cargo insurance is a one-time shot, and the risks beyond the point of the shipper’s responsibility can lead to total loss.

Why Cargo Insurance Matters:

Total Protection: Cargo insurance provides comprehensive protection against damages and losses during international freight transit.
Responsibility Beyond Shipper: In FOB transactions, the shipper’s responsibility ends once the goods are on board the vessel or aircraft. Beyond this point, the importer bears the risk of any mishaps, making cargo insurance indispensable.
Carrier Limitations: Carriers limit their liability, and they are not obligated to compensate for losses beyond their control or not directly caused by negligence.

The Reality of Cargo Insurance:

Underrated Importance: Cargo insurance is often underrated, and many new importers mistakenly rely on carrier liability. However, carriers’ limitations and the complexities of settlements make cargo insurance a vital instrument.
Protection Against Transit Risks: Minimize transit risks by insuring your cargo against physical loss or damage. It’s a simple and cost-effective process that ensures peace of mind.
Handling Damages: If damages occur, your customs broker can file a preliminary claim with the involved parties, provided you can prove damages or loss. A surveyor may be required for a physical inspection.

Obtaining Cargo Insurance:

Request Through Freight Forwarder or Broker: Easily place cargo insurance on your inbound or outbound cargo by requesting it through your freight forwarder or customs broker.
Supplier Insurance Option: Suppliers can also insure your cargo based on transaction terms like C&I and CIF, providing peace of mind in case of unforeseen circumstances.
Determining Premium: The cargo insurance premium is based on the invoice value of the shipment plus freight charges. Providing this information, along with shipping details, helps determine the insured value.
Understanding cargo insurance is crucial for making informed decisions and ensuring your international shipments are protected. Don’t overlook this essential aspect of international trade; instead, make it an integral part of your logistics strategy.