What is cargo insurance?
Cargo insurance is a specific type of business insurance policy which protects your goods whilst they are in transit. You will receive compensation if they are lost, stolen or damaged. Transport costs will also be refunded.
What is the cost of cargo insurance?
The cost of a cargo insurance premium will depend on:
- The value of the goods being transported
- The destination of the goods
- How the goods are being transported
Who needs cargo insurance?
If the value of your cargo is higher than the maximum amount your freight forwarder is liable for, you need to take out cargo insurance. The liability of carriers is limited by law in international trade, so it is in fact very common for the compensation to be lower than your actual loss.
It is your responsibility as the shipper to arrange adequate cargo insurance. Sometimes the freight forwarder will offer insurance as a feature to the customer which can be more costly than having your own policy.
What does a cargo insurance policy cover?
Cargo insurance insures you against the following while your cargo is in transit:
- Damaged goods
- Lost or stolen goods
- Shipping delays
If you are shipping to unusual or risky locations, you should also consider looking into cargo insurance to cover your goods should they be lost, damaged or delayed.