What Is Cargo Insurance?
Cargo insurance provides coverage for a buyer or seller against damage or loss of merchandise during shipping, by air, land, or sea. Cargo insurance is an inland marine or ocean marine policy covering cargo that is in the care, custody, or control of the carrier. Because of the many dangers inherent to shipping, it is of utmost importance to be properly insured. The type of insurance needed will depend on the way the goods will be transferred. Shipping by sea will require "ocean marine insurance", while by land "motor truck cargo insurance", and by air "air cargo insurance".
Under the Carrier of Goods by Sea Act, ocean haulers are responsible for the seaworthiness of the vessel, properly manning the vessel, and making the vessel safe for carriage of the cargo. The ocean carrier is not responsible for negligence of the master in navigating the vessel, fires, dangers, and accidents of the sea, acts of God, acts of war, seizures, strikes, riots, inherent defect and any other causes arising without the actual fault of the ocean carrier. Even when the ocean carrier is proven responsible, liability is limited to five hundred dollars ($500) per package on ocean shipments.
Many cargo insurance forms have co-insurance requirements, sub-limits, or deductibles that an insured may not understand or be aware of when the policy is issued. Cargo insurance can be narrowed down to two types of forms, scheduled or composite. While the scheduled form insures each unit individually the composite form will blanket insure based on units/revenue/miles/weight with an audit at end of the policy. Both forms have benefits depending on the weight/size/units of the cargo, experience of drivers and the way the shipping will be processed.
If shipping cargo is an essential component to the success of your business, it is critically important to have proper cargo insurance coverage. Many businesses have made the mistake of not having enough coverage or overlooking the specifics of their cargo insurance contracts. Either of these can be disastrous to your profitability and long term existence. Once the cargo is out of your hands, you are relying on the experience and expertise of the people loading, transporting and delivering it.
Where to get Cargo Insurance?
It is critical to have the right cargo coverage for the goods being shipped, whether the business depends on transferring goods on a daily basis or if valuable belongings are shipped on a one time basis. Only bind a cargo policy with an insurance firm that specializes with commercial businesses and has extensive knowledge in national & international shipping policies, since coverage will vary a great deal based on the specific needs of the industry. P&G has a team of underwriters that are experienced and will custom tailor a cargo policy specifically for your business. So if you need "import insurance" or "export insurance" and if you are shipping by Air, Sea, Land or Rail get your quote now.
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