Cargo insurance is very popular these days and everyone who is willing to keep their physical goods safe and secure they go for cargo insurance.
What is cargo insurance?
Cargo insurance can be best defined as the coverage or security provided to the physical goods during the shipment process either by land or by air. Cargo is an important mode by which many people move their goods from one place to the other.
This insurance is also known as freight insurance and this has several modes of transportation like air, water, land, postal, and courier services. Also, it is different for different people. Like individuals send their goods or things to their relatives and the businesses have some other motive attached to it.
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Businesses use this to keep their goods safe during exporting and importing. If we go into the legal side of this concept then every good or thing which is under transit must have it. When cargo insurance takes place, it means the goods or things that have boarded from one place will be secure until it reaches the destination.
Importance of cargo insurance
The goods that are in transit are at risk due to accidents, wear and tear, war, or any natural disaster. Theft is also one of the incidences that can cause your goods to be at loss. Cargo insurances help you overcome the loss if any.
The best part of having it is that the value of your goods remains protected against any potential loss. The loss can happen without any prior knowledge or information. This is always a must for any goods or things that are moving from one place to another.
The sole motive of having it is to protect the freight against loss. No one wishes to lose their precious items or goods. It is one of the best strategies to keep your important goods in safe hands and if any unforeseen situation arises, value is always recovered.
Types of cargo insurance
Cargo insurance is for both domestic as well as international transits. This is feasible only with proper co-ordination between two states or countries but it is found that all states and countries have different principles and policies. Due to the very reason, they are of two types.
#1: Land Cargo Insurance
This is a type of cargo insurance in which any goods that are in transit through land comes under insurance cover. Land transit can take place by train, bus, post, or similar. It is only for domestic purpose and hence it is applicable only in the country.
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This is the most common and feasible insurance for frequent shipment of the goods and hence it is applicable within the country only. Any goods that are under transit through the land will be safe against any theft, damage from a collision, and similar risks.
#2: Marine cargo insurance
This is a type of cargo insurance in which any goods that are in transit through the air or by the sea come under cover. This is not similar to land cargo insurance and it is applicable outside the country which means it is international cargo insurance.
It covers any damage while loading or unloading, weather problems, piracy, and similar risks.
Also, it has an added advantage that it is renewable and it can also be permanent if in business. It is good to go with renewable marine cargo insurance if you do not ship very often.
Permanent marine cargo insurance will work well with the businesses. For example, eCommerce businesses. While renewable insurance is a little low on the cost side.
What is excluded from it?
Though cargo insurance keeps you tension free for any good that is under transit it has some limitations as well. The exclusions are:
#1: Custom rejection
#2: Cargo abandonment
#3: War, strikes, riots and civil commotions
#4: Natural calamities
#5: Failure to collect goods/items
What is the procedure to claim cargo insurance?
Taking cargo insurance is as easy as anything but claiming can be a tedious process. Complete knowledge and procedures are there which need to be implemented before claiming the insurance. Every state has a different norm but in some way or the other, it matches the chief requirements.
#1: Informing the insurer
The first and the foremost work in this process is to inform the cargo insurer that the loss has taken place. Proper intimation within a stipulated time is given to the insurer. It is the immediate action from the owner of the goods.
#2: Survey and claim
The next action is of the insurance company in which they arrange for a survey which will confirm the loss. They send a team or the person as per the loss to inquire about the mishappening.
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The surveyor goes to the damage location and notes all the position, date, and type of damage. If the surveyor finds it suitable then the next process of the claim takes place.
#3: Missing items or package
If any item or good is missing then the insured must ask for a monetary claim which is the value of the product.
#4: Time
Time plays an important role in cargo insurance. The claim must be filed within the time limit as mentioned in the documents.
#5: Documents
Certain important documents have to be submitted before the claiming process begins. Depending on the type of claim, the insurance company acts upon it, and if things go well, the claiming process continues.
Conclusion
Cargo insurance is an important part of goods transit. This is legally an inevitable part of goods import and export. Everyone whether businessmen or an individual, both must decide or select a good cargo insurance company that can take your goods from one destination to the other safely and securely. And in case of any unfortunate circumstances, the monetary value of the goods is received. Accidents can happen, therefore keep your goods safe with any cargo insurance.
