Cargo Insurance FAQs
You need to obtain marine cargo insurance prior to the goods leaving the country of origin. Once you determine you may be responsible for insuring shipments, or decide that you want to arrange your own insurance, you should first discuss your needs with us. We will assist you in identifying your exposure to loss and help you to obtain the right level of cover.
The simple answer is to reduce your exposure to financial loss. If you’re an exporter who has not been paid for the goods at the time of shipment, or an importer who has paid for all or part of the goods prior to receiving them, you run the risk of suffering a financial loss if the goods are lost or damaged during transit.
Additionally, you may be required to post a bond and/or cash deposit to obtain the release of your cargo following a general average, even though there was no loss or damage to your goods. By purchasing insurance, we will assume the responsibility and will expedite the release of your cargo.
Lastly, your sales contract may obligate you to provide marine cargo insurance to protect the buyer’s interest, or their bank’s interest. This is especially true when selling goods CIP or CIF. Failure to do so can not only subject you to financial loss if there is loss or damage to the goods, but non-compliance with the terms of your contract with the buyer can lead to loss of sales and legal problems.
General average is an internationally accepted principle of equity dating back to ancient times. Essentially, if one or more interests involved in a maritime adventure voluntarily sacrifices all or part of their goods to save all interests from an impending peril or loss, the interests saved will reimburse the interest suffering the loss so that each shares the loss equally. A classic example used to illustrate this principle is that of a vessel which runs aground in a storm and is threatened with the loss of the entire vessel and its cargo unless the vessel can be refloated. Efforts to refloat the vessel–such as the jettison of cargo to lighten the vessel; or expenses paid to a salvor to pull the vessel off the grounding point–would be shared by the vessel and all cargo interests.
Firstly, the carrier would not be responsible for your portion of general average. Secondly, the carrier is only responsible for loss or damage when it is due to their own negligence while the goods are in their care, custody or control, plus the carriers are exempt from certain causes of loss or damage. And lastly, the monetary liability of carriers is often very limited.
Relying on the buyer’s or seller’s insurance may be a viable option, but you must be satisfied that the insurance has in fact been effected and that the insuring terms, valuation, and limits provided by each insurer on each shipment are adequate to meet your needs. Arranging your own insurance once under an Individual Policy or Open Policy to fit your specific requirements for all your shipments would be much more simple and cost effective.
Yes, cargo insurance can be purchased to protect your cargo. This applies to both domestic and international cargo shipments.
Typically, items such as cars, electronics, computers, fragile goods, food and plants and a range of commercial goods are all acceptable things to insure. There are other items as well, so you need to speak with us about the specifics of what you want to insure.
It is a term given to the coverage offered for the shipment insurance. This coverage implies protection from the beginning of the transit and whilst in the warehouse of the shipper, until the cargo reaches its destination and / or the customer’s warehouse. The origin and destination locations are included, even if they are far away from the ports where the loading or unloading is done.
We would need the nature of goods, packing, route, conveyance and values. Other details may be required depending on the type of goods on which insurance is being requested.
To help us provide you with a competitive rate, you need to make available information such as:
- The business operations details of the Insured Information about the destinations and ports including the inland transits before loading and after clearance, especially if the distance is long and transportation is inferior
- Information about the factors to which the freight might be susceptible to, such as leakage, breakage, wetting, sweating, theft, pilferage, etc
- Importers or exporters who wish to arrange their own insurance, need to supply underwriters with the details about tonnage, age and ownership of the vessel, packaging methods involved, extent of the journey, and the time of the year the journey is to begin
When the damage or the loss of the shipment is discovered, follow the instructions printed on the insurance certificate and immediately report the loss to us and notify us of your intention to claim a loss. Also contact the surveyors to visit the destination to investigate the cause and extent of the losses. Surveyors are appointed by the insurer.
You should act truthfully keeping nothing concealed while making your claims. You must act as a far-sighted uninsured.