What is Cargo insurance

You make a lot of investment in your business goods. However, losing those goods to unfortunate events while transportation might pose a great risk to your business. Thus, to ensure that an unfortunate incident does not cause you to lose a fortune, you should ensure that your cargo is insured. Cargo insurance is the insurance which safeguards the investments made by you on your cargo in cases of mishappenings occurred during the transportation. It works just like any other insurance does. With the rising instances of damage, theft, or loss of goods during import or export, insurance has become very important today.

Cargo insurance explained

It is meant to safeguard you from the losses resulting from damage or loss of cargo. The amount of the freight you lose is reimbursed to you by the insurer. The events generally covered in insurance include natural disaster, accident of the vehicle carrying the cargo, abandonment of cargo, rejection by the customs of the receiving end, loot, piracy, and war or related acts.

Why is cargo insurance crucial?

The main benefit of insurance, just like any other insurance, is that by paying a little sum, you are eligible to get the payback for the complete damage caused to your cargo during an unfortunate event. Other benefits include the following:

● According to your insurance plan, you can also earn profits and interests even if you do not require to get a claim from the insurer.

● You can rest assured about the movement of your freight.

● No unfortunate event that harms your cargo shall affect your business or your pocket.

● Any loss to the cargo is covered by the Insurer within a little time span.

Different types of cargo insurance

It is categorised into the following types:

1. Land Cargo Insurance: This is done to ensure the safety of the freight transported on land, in trucks, and small vehicles. It covers domestic cargo mostly.
2. Marine Cargo Insurance: This insurance type covers international cargo, by covering any damage caused to ocean freight and air freight.
3. Single coverage: It covers a single shipment and benefits businesses that do not move cargo regularly.
4. All Risk: This type of insurance covers any damage or loss of cargo until and unless they are prone to such damages or losses. However, it has many limitations and does not include natural causes, custom rejections, war causes, etc.
5. Open Coverage: It is meant to cover all the losses incurred to the shipments of one business in a particular period, such as a year.
6. Warehouse to Warehouse: This insurance is a great option for goods that are constantly loaded and unloaded from one warehouse to the other to prevent damages and losses on their way.

Limitations to cargo insurance

Certain limitations should be considered, as the insurance does not cover these.

● Damage of goods caused by improper packaging

● Already faulty items in the cargo which led to damage

● Freight such as fragile products, hazardous materials, some electronic items, etc.

● Inefficient modes of transport cargo

Therefore, you should read your policy agreement carefully to be very clear with all the terms and conditions before taking the best policy for your cargo. Having an insurance policy for your cargo is as significant as having a policy for your car, home, shop, or other valuable assets. Some people fail to acknowledge the importance of cargo insurance until an unfortunate incident causing loss of cargo occurs, making them face huge losses.  Therefore, before initiating any movement of your cargo, make sure that it is insured.

If your business involves continuous movement of goods and cargo from one place to another, and you are in search of a partner you can bank upon to do the task of transportation for you, we will be delighted to help you.

ECU360 provides its customers a complete logistics solution, while customizing its services according to the requirements of the customer. Visit our Website and get your quote now.