Cargo Insurance Policies
The decision of whether or not to insure your freight is not always a clear-cut, simple choice. There are many factors to consider, such as the total value of the goods shipped, the shipping origin and destination, the mode of transportation, etcetera. Once the determination is made, the next question is how to ensure the shipment. To assist you in your evaluation, the options below outline the types of coverage available.
When transporting goods with a carrier, a shipper is granted a minimal amount of coverage in the event of loss or damage in transit. The coverage is called legal liability and it is the legal obligation of a carrier to provide remuneration in the event of loss or damage of goods they are transporting. Limitations vary by model and are established by international/domestic treaties.
For domestic shipments the coverage is equal to $0.50/LB with a $100.00 minimum provided the cost of the goods is greater than $100.00. In the case of partial loss/damage, only the lost or damaged portion of the freight is subject to the claim settlement amount of $0.50/lb. For international shipments, the legal liability set forth by the Warsaw convention is $20.00/kg or the actual value of goods if less than $20/kg. For international sea freight shipments, the legal liability limit is $500 per customary shipping unit. (FCL: 1 container = 1 shipping unit, LCL: shipping units = piece count on the Ocean Bill of Lading)
When there is partial damage/loss, the legal liability settlement is based on the weight or number of units of the damaged/lost pieces(s), not the total shipment.
Cargo Insurance
An all-risk cargo insurance policy is the broadest form of shipping insurance and will cover any physical loss/damage from any external cause. The purpose of such a policy is to provide the insured party or individual with reimbursement should the cargo not arrive safely to its destination. Premiums are based on commodity, value, destination and mode of transport.
Our’ Standard policy provides simple, standardised pricing for virtually all scenarios. Coverage limitations can occur based on:
- • Cargo values greater than policy limitations
- • Certain commodities are not covered or have limited coverage
- • Certain countries have no coverage or surcharges