Types of Cargo Insurance and Their Benefits

Whether you ship via air, water or land, there is always a certain amount of risk associated with any kind of shipping method. The chances of lost or damaged goods along the way cannot be ruled out entirely, as there are a number of unpredictable, external factors that may occur. Cargo insurance covers everything from minor damages to theft and loss, making it an essential option.

This post discusses why cargo insurance is necessary and the different types of policies that you can choose from.

Land cargo insurance

As the name suggests, this type of insurance policy is made for consignments that are transported on land. Anything that is moved by trucks, vans, utility vehicles or even rail, is covered. Those who opt for this type, will protect their goods from theft, damages dues to collision or accidents and other similar factors.

Marine cargo insurance

Any package transported by ship or air can be insured by marine cargo insurance. Damages due to weather conditions, loading and unloading, piracies and other relevant issues, are covered by this policy. Choosing this coverage ensures that you don’t face major loss incurred under any unfortunate circumstances. Marine cargo policies primarily cover international shipping.

There are three specific policies under the category of marine cargo insurances. They include:

  • Open cover cargo policies

Insurance coverage against various different consignments that are chosen by the insurance holders, activate the open cover cargo policies. These policies are divided into two categories: renewable and permanent policies. The former must be renewed after the policy expiration for a particular value. However, the latter has a specific time period during which countless shipments can be covered.

  • Specific cargo policies

In this case, the shipping company usually approaches an insurance broker or agency for a particular consignment. When the coverage is made for particular cargo, it falls under the category of specific cargo benefits. These policies only cover water transported shipments, which are also known as voyage policies.

  • Contingency cargo policies

For certain consignments, the receiver is responsible for the safety of the cargo and has to insure it against loss and damage. The problem arises when the receiver does not insure it and refuses to accept the package when it gets damaged during transit to avoid liability. Contingency cargo policies protect the sellers or senders in such situations. However, it’s very expensive and the chances of losing the case are high which can lead to further loss.

Benefits of cargo insurance

The benefits are dependent on the type of coverage that you have chosen. There are three broad types of cargo insurance that include:

  • All Risk Coverage,
  • Free of Particular Average and;
  • Shipment-to-Shipment.

The risks that are covered under the cargo insurance include packaging damage, custom rejection, infestation, non-delivery, fire damage, employee dishonesty, abandonment, weather damage and many more. Opting for cargo insurance ensures that you are able recover the financial loss at least partly, in case the consignment is damaged in any way.

Opting for cargo insurance is very important when transporting goods. It assures that your items are transported safely, with coverage to assist you in the case of unpredictable situation. Any misfortune that occurs during shipment can be avoided by choosing a reputable and experienced service provider. At Viamar Scilla Transport International Inc. we are always available to guide you with the right shipping insurance options. Call us for appointment at 1-800-277-7570.