Cargo insurance during transportation is a guarantee of financial security

As you know, it is impossible to eliminate risks. There are many external factors that can make harsh adjustments to the planned plan in a second. But you can always keep the situation under control. If we are talking about business processes, then risks can be minimized by choosing reliable counterparties and forming a comprehensive business insurance.

For companies and private entrepreneurs, whose activities are associated with a constant turnover, an important element of stability is transport insurance. With the help of this financial instrument, you can protect the interests of owners, carriers and partners in cases where there was damage, theft or loss of cargo.

Cargo Insurance is a type of transport insurance that is directly responsible for guaranteeing the preservation and delivery of cargo while maintaining the declared characteristics. This document protects the property rights of the owner of the goods and covers damage in case of specific force majeure. When drawing up a document, it is worth getting the advice of a lawyer and / or insurance agent in order to draw up a document legally correctly and take into account the most dangerous risks for business. It is also worth paying attention to the accuracy of the wording. In particular, an inexperienced sender may confuse cargo and comprehensive insurance, and as a result, will not receive compensation for losses. Remember that the comprehensive insurance covers only damage from damage to the vehicle, but the insurance of the transported property does not include. At the same time, when drawing up a cargo policy, the property interests of the owner of the cargo are detailed. Such a document includes the calculated rate of monetary compensation in the event of an insured event. Compensation is usually calculated based on shipping charges and expected profits.

How to draw up a cargo policy? It all depends on the method of forming the document. The first option assumes that the contract specifies a list of risks that the agent insures. This is the so-called inclusion method. In turn, the policy, drawn up according to the exclusion method, contains a list of risks that are not subject to insurance.

Insurance of goods in international transport begins with the determination of the party responsible for the safety of the object of transportation. In accordance with the rules of international trade Incoterms and depending on the type of transaction, responsibility is imposed on the sender or the recipient. Thus, in order to correctly draw up an insurance policy, you should take into account the basic conditions for the delivery of goods in terms of transportation and the Incoterms rate. Quite often, you can hear the question of who should carry out cargo insurance. There are several options here – the insured is the owner of the goods, the carrier or the forwarder.

When drawing up a policy, indicate a certain set of insured events that may occur during storage, transshipment and transport delivery of cargo. A standard policy usually includes the following risks:

• destruction, damage to goods due to an accident
• theft of goods
• damage to goods during handling

The terms of delivery and the carrier’s responsibility are spelled out in the contract, and in the event of an accident (crash) due to the fault of the transport company, the insurance agent of the latter will compensate for the damage. But often damage to the cargo occurs due to the fault of third parties, therefore, such insured events must be indicated in the policy.

Cargo insurance on ships

Is it worth talking about the risks that hang over the vessel during the passage of difficult water routes, if threats lie in wait for a floating vehicle literally every mile. But if it is necessary to draw up an insurance policy correctly, it is important to understand the issue in more detail. To begin with, during transportation by sea, force majeure may occur such as bulk or collision of floating vehicles, damage to the vessel / cargo as a result of a storm, grounding, ship breakdown, fire on board, etc. To neutralize such troubles and to secure the company from losses, such risks should be indicated in the contract. In the maritime industry, most often the objects of insurance are the ship, cargo, freight, expected profits and wages. If a commercial company orders transportation services, the main task will be ship cargo insurance .

The company “GALS MARKET” with its central office in Odessa has been actively working in the field of accompanying sea transportation for several years and is familiar with the rules of marine insurance firsthand. Our customs brokers accompany clients’ cargo on a daily basis in the implementation of sea container transportation and are ready to offer an individual solution, guaranteeing the result. If you want to protect your business from unforeseen losses and costs, and you need ship cargo insurance, please contact us.