Any company that ships cargo needs freight insurance. Carriers operate under a set of guidelines that limits their liability. If anything happens to your goods in transit, you may not have any recourse to recoup your losses if you are uninsured.
With today’s supply chain delays and rates up almost 122% compared to the pre-pandemic environment, you need to watch every dollar and protect your livelihood from whatever might happen. Freight insurance won’t prevent the loss, but it will give you some peace of mind and minimize the damage should anything occur.
Cargo insurance is essential to protect your investment and your business. But before you purchase your policy, consider these vital points.
1. Freight insurance won’t prevent cargo accidents
Accidents will happen; that’s a given. While your logistics partner does everything possible to monitor your cargo to its destination, some incidents are unavoidable. Theft, vehicle tipping, lost cargo, or improperly packed goods could be damaged in transit, but freight insurance will cover the loss or damage if it comes to that.
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2. Ensure your shipper meets all packaging and crating criteria
Proper packing, crating, and labeling protect cargo from damage and delays. It is your responsibility to ensure your goods are packed properly, as carelessness or negligence could void your coverage.
3. Make sure you understand your freight insurance policy
Read your policy carefully to understand what perils and losses are covered and what is not. Some shippers assume that an all-risk policy gives them umbrella coverage for just about anything that can happen, but this is not usually the case. It is also important to note that freight insurance is not cut-and-dried. The underwriting process does not have strict guidelines, so policies can be tailored to your unique situation and risk environment.
4. Communicate the material facts of your goods
When applying for freight insurance, you must disclose the type of goods you are shipping, their value, and any other facts that might influence the underwriter’s decision. Failure to do so could result in a denied claim, so be transparent. Higher risk cargo could mean a higher premium, but it’s better to be covered than risk a total loss.
5. Ask a lot of questions
If you have questions or concerns about the claims process, be sure to ask questions. For example, if you ship a lot of goods overseas, would the claim be filed at the destination or at home? And if the claim is filed overseas, how will you be paid? Ask about deductibles and determine the circumstances under which you would be liable.
Do You Have Questions About Cargo Insurance?
Freight insurance isn’t always easy to understand, but it’s a must-have for any company that ships cargo domestically or internationally. At DTS World Cargo, we’ll work with you to ensure you obtain the freight insurance you need. Our experienced team will walk you through the ins and outs of freight insurance and support you throughout the process.