29 Apr Cargo Insurance and Why You Need It
When you are transporting cargo, there are multiple modes of transportation utilized before it reaches the final destination. Be it by air, sea, truck, or by rail, there are usually at least two modes of transportation that it takes between origin and consignee. Sometimes things get jostled in transit, or even broken and smashed. All purely by accident. And when this loss or damage occurs, no one usually wants to take the blame to make things right between the cargo owner, and the cargo receiver.
Because of this, sometimes it’s necessary to invest in insurance for your cargo, as each mode of transport has its own, limited form of liability that may or may not make the cargo owner whole again. This is where cargo insurance steps in.
Future Forwarding is not only experienced in this, but when a loss or claim occurs, we submit a claim to the insurer who will review the claim and if approved, pay the cargo owner and subrogate against the responsible party.
While cargo insurance is, well, added insurance, there are also three simple ways to protect cargo in transit and avoid a claim. They are:
- Pack the goods in containers of proper strength and weight.
- Properly, block and brace cargo to eliminate empty spaces where cargo could move around and be damaged.
- Consider the forces put on a shipment during transit and pack appropriately.
There are a number of things that can happen to the cargo if it’s not packed properly, but have you considered what would occur if something happened to the vessel? The rule of General Average comes into play then.
If you don’t have cargo insurance, then a cash bond must be posted and is held until the final General Average amount and settlements are agreed upon. This, however, could take years to process. The best thing about cargo insurance? You get to avoid this hassle and have your cargo discharged without delay or a pending financial guarantee.
Supply chains are stretched thin and every piece of cargo is in demand upon arrival. While the loss of overdue cargo cannot make it reappear and satisfy upset customers, it can at least protect the cargo owner from being out of pocket for the loss of the merchandise. Future Forwarding’s open cargo policy is extremely competitive and coverage can be attached mid-shipment. Contact your Future Forwarding representative for a quote today.