Common cargo insurance misconceptions

People who are new in the business of transporting cargo, might have different perceptions about cargo insurance. We noticed two main misconceptions when dealing with the specific terms:

-Who is responsible for a specific type of loss?

-How much of the coverage is paid by the insurance companies?

Regarding the first question, the shipper sending the product to a specific destination, often assumes that the carrier is responsible for transporting the product in perfect conditions, or compensate if the product is somehow damaged.

However, the fact is that carriers cannot be held responsible for any damage or loss incurred by natural disasters. Natural disasters are unpredictable and, although they don’t happen all the time, the fact is that your goods could get damaged or wet on board. Owners and shippers have to make sure that the consignments are packed well, but also need to buy adequate cargo insurance coverage customized for coverage in case of the unexpected happens.

Relying on the coverage offered by the carrier or the supplier is not enough. Obtaining a separate cargo insurance gives the owner control on the type and amount of protection .

-How much of the loss is paid by the insurance company?

Shippers themselves are liable if the cargo is stolen or mishandled. Generally, the carriers typically limit their liability and compensation for the stolen or damaged goods. The coverage that carriers normally offer, are not enough to pay for  replacement.

According to the bill of landing and the tariffs, the carrier may limit their liability to a very minimum amount. So, it is advisable for the shippers to purchase their own cargo insurance coverage rather than taking a chance of incurring big losses. By factoring in cargo insurance into the total cost, shippers can take control and and limit the risks. Find out how can help you get a great quote.