Transporting goods comes with risks, more so when shipping them around the world. Anything can go wrong during transit by air, land, sea, or rail.
Protecting the cargo is a necessity for businesses. It’s especially important for those transporting their goods from one place to another.
Cargo insurance provides coverage against all risks of physical loss or damage to the freight during transportation.
In this guide, you’ll learn about what is cargo insurance. Read on and discover how it can help your business.
What Is Cargo Insurance and How Does It Work?
Cargo insurance protects shipments when using freight transportation. After all, the risks remain even when investing in the necessary precautions to protect your shipment from damage.
Insuring your shipment provides the necessary protection when external factors lead to the damage or loss of the shipment. These events include the following:
- Vehicular accidents
- Cargo abandonment
- Acts of war
- Customs rejection
- Natural disasters
When these occur, your cargo insurance pays the insured amount. It’s what protects your business from potential financial loss.
Cargo Insurance Types
You can get cargo insurance for both domestic and international shipping. The coverage may vary, from an “all-risk” coverage to a “free from particular average” coverage. Some depend on the type of transportation used, such as the following:
Land Cargo Insurance
As its name suggests, this insurance covers land-based cargo transportation. In most cases, the cargo is aboard a truck or other delivery vehicles.
The insurance range is within the country, making it domestic. Land cargo insurance covers various untoward situations, including theft, collisions, and more.
Marine and Air Cargo Insurance
Marine insurance covers cargo transportation by sea. Its coverage applies to international transportation. Air cargo insurance has the same setup.
These insurance policies commonly cover damage from loading and unloading. However, it also covers extreme weather and piracy. Regardless, check with your insurance company to determine your coverage specifics.
Marine cargo insurance can either be renewable or permanent. A suggestion is to go for the former if you aren’t a frequent shipper. It’s an inexpensive option considering the cargo insurance cost.
Cargo Insurance Requirements
These often depend on your chosen policy. For instance, you have a different set of requirements for car transportation and hauling. You can read about it here.
As always, check with your carrier about your options. At the same time, ask for a cargo insurance quote. It allows you to know what to expect after paying for an insurance policy.
Ask Your Carrier Today
What is cargo insurance? It is a means to protect your business from financial loss. It’s especially important when something happens to your shipment.
With potential risks during transportation, you need insurance for your cargo. Deciding to get insurance is only half of the battle, however. Make the most out of your investment by working with a reputable insurance company.
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