People are shipping items across the world on a regular basis. It doesn’t matter if it is for personal use or a part of many supplies chains that logistics companies Yanbu help with daily – stuff travels miles and miles across the globe to reach those who need it. But what if you are shipping cargo, and worry about it? What happens if the cargo gets lost or damages? Who is responsible, and who will fix all the damage that appears? Well, this is where cargo shipping insurance comes in. Sadly, not a lot of people shipping their cargo know how to deal with it. There are many types and limitations on it, and it can be too intimidating for someone with no logistics knowledge. That’s why today we look at some ways you can insure your cargo – and whether you even need to do it.
What even is a cargo shipping insurance?
Let’s start with the basics – what’s a cargo shipping insurance? Well, legally, Four Winds Saudi Arabia, as well as other carrier companies, need to offer some sort of insurance policy for your cargo. That is a minimal insurance policy that we call carrier liability. Basically, we place a guarantee on your objects. However, if things go awry during the travels, the reimbursement you would get is often too small for anyone.
That is because this carrier liability has a limited coverage – and anything can damage your cargo. The weather, the traffic – even other people can be responsible, and this insurance won’t be able to cover it. That is why we, as well as other shipping companies, can offer you various cargo shipping insurance policies. They are there to protect you from any loss or damage that can occur. This protection is valid while your items are in our storage units, and while they are traveling – up to the moment that they reach the customer.
What are the limits to cargo shipping insurance
Of course, just like with everything when moving your cargo, there are limits to the shipping insurance you can get as well. You will be hard pressed to find insurance that will protect from all losses that your goods can suffer. That is where a lot of different types of insurance come from. You need to talk to your logistics company about what they offer. Here, you might run into the names like “broad form,” “all risks,” “legal liability,” as well as “motor truck freight.”
However, none of them can give you complete protection against the Carmack Amendment and the common law liability in the United States, or a similar law in other countries. In the States, the Carmack Amendment is a law that concerns the motor carriers and was put into action by Congress in 1935. Its main goal was to create uniform rules for interstate shipping procedures and consists of rights, duties, and liabilities of shippers and carriers in case of a loss.
It’s a smart idea to look into the laws of your country and search for similar items. Sometimes, they might exclude certain cargo from protection, or cover only specific parts of the shipment. The equipment may be covered, or the coverage will not apply to natural catastrophes, etc. That can vary from a place to place, so it’s important to talk about what the cargo shipping insurance covers with your carrier.
What are the different types of cargo shipping insurance?
As we already mentioned, all this diversity only serves to create different cargo shipping insurance policies. First, we can separate it on international and domestic. The international one might be more ambitious. You need to coordinate different countries and laws in order to carry your shipment through. It also separates into different categories based on the method of transportation:
- Land cargo insurance – this is the cargo shipping insurance you want to take when you are transporting the goods by trucks and similar vehicles. It usually protects your items from thieves, collisions and similar accidents. Most likely this will be the one you are taking for domestic travels as well – and it might only be valid in Saudi Arabia.
- Marina cargo insurance – is the insurance that covers the travel of goods by air and sea. This type of insurance will also touch upon the loading and unloading processes, as well as the weather, pirates and similar issues. This is what you will want to have when dealing with international freight forwarding.
What are the benefits of getting insurance?
Now that you know all about different cargo shipping insurance policies, it’s time to talk about what they will actually cover. Again, this might depend on what type of policy you actually use. If, for example, you use “all risk coverage,” then you will get a policy that covers a wide span of risks. Again, this will not cover everything as the name implies. Instead, it will protect you from infestation and bad packing. If your customs brokerage process was somehow unsuccessful, or the workers abandon the goods, you will also have protection.
On the other hand, you might get cargo shipping insurance that offers “general average coverage.” This is usually a requirement when you are shipping cargo internationally. It protects only from partial loss of the shipment. Other cargo holding owners on the same ship will need to pay the costs of compensating your losses when you have this insurance. If you want something more lengthy, then “warehouse to warehouse coverage” might be the best for you.
As you can see, cargo shipping insurance is a broad topic, and there is a lot to say about it. However, one thing is clear. When shipping your goods, make sure you talk to your carrier about the insurance policies they offer. Having insurance is important. Otherwise, you might get stranded with damaged goods and significant money loss!