Insurance is a very important matter when handling export shipments.
When you want to ship your cargo thousands of miles away outside of a given country, with no control over the weather, port closures, or accidents, you want to make sure that your cargo is secured. That’s where insurance comes handy. Adding insurance to your cargo shipment protects you from losing your cargo by compensating you if anything happens to your cargo.
There are 3 types of insurance used in the logistics business – perils, broad-named perils, and all-risks coverage.
The most commonly used type of insurance is called an “all-risks” plan. The all-risks plan basically covers almost everything that could happen to your cargo, and is accepted as coverage by transportation companies.
One of the most important things to remember is that no insurance policy covers your cargo if your customer, at the cargo’s destination, refuses to dispatch the container or does not pay destination charges.
There are a couple important points you must consider when insuring your cargo.
First, you need to choose the right amount of coverage for your cargo. The typical amount within the shipping industry is 100% or 110% of cargo value to compensate the product, time, and labor, if the cargo gets damaged or destroyed while in-transit.
Second, you need to figure out which party will be responsible for obtaining insurance before you ship out a container. Usually, terms of the sale include the insurance liability and show where the seller’s responsibility ends and where the buyer’s begins.
Next, you must determine who will pay insurance costs. Insurance costs depend on the value of cargo, how much coverage is needed, and several other criteria.
Finally, remember to always have all documents organized and ready. There are a couple of important papers, such as a copy of the Bill of Lading of the subject shipment, or a copy of the insurance policy, that you will want to keep orderly and on-hand to ensure a smooth shipment.
Insurance companies, airlines, logistics specialists, and freight forwarders usually offer insurance coverage.
Insurance is a vital part of protecting yourself from a hefty loss or even loss of your customer’s portfolio. At MTS Logistics, we have been helping our clients with their import/export insurance for years through our experienced staff and great customer service. Please let us you if you want to know more about our insurance policies.