What Is Cargo Insurance and How Does It Work?
Cargo insurance is an important tool for businesses that rely on the global transportation industry to move their goods.
It covers the many of the risks associated with transporting goods by sea, air, road, or rail, and it pays the cargo owner for its losses due to cargo loss or damage.
When purchasing cargo insurance, the cargo owner should consider the value and nature of the goods being shipped, the mode of transportation, and the destination.
If your seller offers to arrange insurance coverage, then it is vitally important to know the following information about the insurance coverage:
There are several ways companies can insure their cargo shipments.
One way companies can insure their cargo shipments is by purchasing a standalone cargo insurance policy from an insurance company through an insurance broker.
The policy, which typically lasts for a specific period of time , will specify the terms, conditions, and exclusions of the coverage.
The purchaser can choose a policy that meets its specific needs and risk profile.
Standalone cargo insurance policies are often used by major companies that have a high volume of shipments or that need to cover a wide range of risks.
Another way companies can insure their cargo shipments is by purchasing cargo insurance as part of a broader insurance program.
This approach involves purchasing a package of insurance products that may include cargo insurance as one of several coverages (e.g., property insurance, liability insurance, and business interruption insurance).
This approach can be more cost-effective for companies that need to purchase multiple types of insurance, as it allows them to bundle the coverage and potentially secure a discount.
In addition to purchasing cargo insurance from external sources, some major companies self-insure some or all of their cargo shipments.
This approach involves setting aside funds to cover potential losses and assuming the risk of loss or damage to the cargo themselves, rather than purchasing insurance coverage from an insurance company.
This approach may be taken by companies that have a low risk profile or that have a strong financial position and are able to absorb the potential costs of a loss.
Type of containers used in Maritime Transport
Fast, cost-effective shipping service to China
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