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Why Is Cargo Insurance Necessary?

Why Is Cargo Insurance Necessary?

Your auto business is growing and you’re interested in expanding internationally. The first step is to research shipment methods and services to understand what options are available for your business. From container shipping to RO/RO shipping, there are plenty of options to help transport goods to your buyers. How do you ensure your vehicle transport is secure from dock to deck?

Freight forwarding companies, such as ViaMar, offer ancillary services, including marine cargo insurance, to ensure your goods being transported are protected. With an estimated 90% of all cargo shipments transported over water, insurance is a necessary investment.

Benefits of Cargo Insurance

Circumstances during transport may occur that are out of the control of the buyer, shipper or carrier. As outlined by The Research Pedia, external factors may include weather conditions, loading/unloading damages and even piracy. When transporting goods internationally, laws, policies and border regulations may differ depending on your location of interest. Insurance helps protect your goods from customs rejection that may be caused by inaccurate waybills or missing documentation.

If your shipment is faced with any of the above issues, the cost of your time is also an expense that insurance policies help to protect. Below are common types of insurance coverage and clauses to help protect your business.

Cargo Insurance

  • General Average Coverage – Let’s say your auto shipment sets sail and the vessel runs into a weather condition which causes damage to various crates. According to Entrepreneur, you may have to pay for your share of the loss. Having this type of coverage can help you in this case.
  • Free from Particular Average (FPA) – Research Pedia states this type of insurance covers costs associated with weather, theft, on-board fires, and collision.

Marine Cargo Insurance

  • All Risk – A premium coverage defined by the Royal & Sun Alliance Insurance Company of Canada, Inc. (RCA) as “protection against loss or damage from all perils except those specifically excluded.”
  • Total Loss – A basic coverage that will help if there is complete destruction of your transported goods.

How Much Does Insurance Cost?

There are many factors that could determine which insurance coverage is right for your business. Your decision could be based on the value of goods being shipped, the duration of travel or destination and the method of shipping. The method could be container shipping, RO/RO shipping or interstate shipping by-road. You can easily determine which marine insurance coverage best suits your business needs.

If you’re interested in expanding your business internationally, it’s important to look at all factors affecting the shipment of goods. Learning about the various risks associated with cargo shipments and the safety precautions available, such as insurance, is a good start. ViaMar is a great resource for understanding the requirements moving forward with vehicle transport and success of your business.

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