IMPORTANCE OF MARINE CARGO AND CARGO IN TRANSIT INSURANCE IN LOGISTICS
Airwagon Cargo Movers Ltd
To be the market leader in the Kenyan clearing and forwarding industry.
Marine cargo insurance allows importers and exporters to protect their sea freight from theft, damage, or general damage. Shipping companies as well as consignees can buy marine cargo insurance policies from providers to secure their valuable shipments from all kinds of damage. By paying just a fraction of the net value of your cargo you can protect yourself from losses in the case of any accident or untoward incident.
The advantages of marine cargo insurance for freight forwarders, importers and exporters.
Insuring the sea freight shipments will protect independent freight forwarders like you from financial losses no matter if your shipment gets damaged or not. The best benefits of purchasing marine cargo insurance are:
? All risk coverage: It secures the shipper/consignee against loss or damage of the shipment due to improper handling, theft, damage, or other external factors.
? Warehouse to warehouse coverage: Marine cargo insurance also keeps you covered against losses while the shipment is in transit from one warehouse to another.
? General coverage: This covers any partial losses to your ocean freight shipments.
Simply put, purchasing cargo insurance gives you much-needed peace of mind in the knowledge that your valuable cargo is secured. It will protect your cash flow from unprecedented stoppage and generate profits when included in the coverage. Moreover, most insurance providers offer efficient coverage of claims.
Types of marine cargo insurance
? Open coverage
Open coverage will insure your cargo for one year and you can include several cargoes under one such insurance. This kind of insurance is ideal for risk management in case you ship frequently. You can choose from two kinds of open coverage insurance- renewable and permanent. The renewable insurance can be renewed after the delivery of the cargo. Therefore, they are ideal for single trips. On the other hand, the permanent insurance allows for unlimited trips of several cargoes within a specified time frame.
? All risk
The all-risk cargo insurance covers almost all causes of loss or damage provided the cargo is new and not prone to rot, or damage. However, this kind of insurance doesn’t cover losses due to natural disasters, wars, strikes, negligence of the shipping company, customs delays, unpaid goods, or rejections.
? Free from particular average
This kind of insurance only covers substantial losses or damage to the shipment. It also covers partial losses in cases it happens due to sinking, collision, or burning. One major advantage of this insurance is that it covers all the risks that are not covered by all-risk insurance policies including natural disasters, collisions, bad weather, sinking, theft, non-delivery, etc.
? General average
The general average insurance is a basic requirement for ocean freight which insures the policy holder for partial losses to the cargo. This kind of insurance works on the principle that the owners of all shipments in the vessel contribute to the losses incurred by all or any cargo. Therefore, in this kind of cargo insurance, you need to pay for the losses of other shipments even if your own cargo makes it to its destination intact.
Things that are not covered by marine cargo insurance
Although cargo insurance covers all your damage, it might not cover certain special freight types such as dangerous goods, certain kinds of electronic devices, and highly delicate and costly items. Additionally, the cargo insurance provider isn’t going to cover damages that have been caused by poor packaging or defective items in your cargo.
Reasons why you need to insure your cargo
Your shipment is prone to several risk factors as it moves from one territory to another passing through different hands, different ports, and different trucks. Additionally, external factors like weather and traffic conditions could also play a part in cargo damage. Keep in mind that the longer the transit times of your shipment, the greater the risks of damage, loss, or theft. Additionally, the loss or damage of an expensive shipment could take a heavy toll on your finances unless you insure it.
What is Goods in Transit insurance?
Goods in Transit insurance is a policy that cover for loss or damage to various types of goods while in transit by road, rail or any inland waterway within the geographical area set out in the policy
This Policy provides Indemnity against Accidental Loss or Damage to goods belonging to or for which the Insured is responsible whilst:
? Being loaded upon or unloaded from any Vehicle, Trailer or Wagon
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? In Transit on any Motor Vehicle, Trailer or Wagon
? Temporarily housed in the course of transit
The cover can be arranged to give protection for goods carried either
? On specified vehicles or trailers owned by the proposer
? On any vehicle or trailer owned by the proposer
? Any specified vehicle hired or being used by the proposer
? Whilst being transported by any road or rail transporters hired by the proposer
During transit, the policy covers the risk of loss or damage occasioned by
? Fire
? Lightning.
? Breakage of Bridges.
? Collision with or by the Carrying Vehicle.
? Over-turning of the Vehicle.
? Derailment or accidents of like nature to the wagon.
The cover commences when the goods are being loaded on to the transporting Vehicle and ceases once the goods are unloaded at the final destination.
In the event of the Vehicle or Wagon not completing the transit for any reason whatsoever, the policy extends to cover the property whilst being transferred to and conveyed by any on-carrying vehicle
Even if your carrier is legally liable to cover the loss or damage of your shipment, their limit is usually much less than the actual value of your cargo. Nevertheless, there are many scenarios where cargo insurance isn’t necessary.
Therefore, it is always suggested that you as the importer or exporter should check the incoterms of your contract to find out its scope and only pay for insurance when it is required.
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