If your business is constantly shipping goods whether its national or international, it is imperative to understand the in and outs of freight insurance. This way you are prepared if and when you need to use it due to possible damage or loss to your products.
Federal Law requires truckload shipping companies to carry some sort of liability insurance. However, the liability insurance may not be enough to protect your shipment. Freight insurance covers against physical loss or damage to your products.
Some logistics performance shipping companies offer door-to-door all risk insurance for shipments all over the world. This type of insurance is known as “All Risk” coverage.
There is no single standard form of freight insurance a carrier can go out and buy and be fully protected. There are a few coverage types that you need to know about when looking for additional freight insurance.
Land Cargo Insurance – is freight insurance for land shipments that are for domestic transport only within the boundaries of one country.
Marine Cargo Insurance – primarily covers sea and air shipments, however there are some that will cover land transport as well. This insurance is not limited to one nation, which makes it a good option for international shipments.
Open Coverage – for businesses that ship regularly this is an option makes sense. It is a marine insurance that covers multiple shipments made during the life of the policy. The insurer must give a detailed list of the type of goods and destinations in order to keep the policy.
Single Coverage – is a marine policy that insures one-time shipments.
All-Risk Cargo Insurance – gives the broadest coverage for shipments and insures your shipment against external causes of damage. The exclusions in the coverage are: loss due to delay, rejection of goods by customs, improper packing, abandonment of cargo and loss due to the nature of the product.
General Average Coverage – is when you transport goods by sea, and you share responsibility for the boat and all the cargo with the shipowner and the other cargo owners.
Warehouse to Warehouse Coverage – ensures your shipment from the moment it leaves the seller’s warehouse until it reaches the final destination warehouse. If you don’t get this type, then your shipment is only protected with its on board the cargo ship.
Getting freight insurance for when your freight is in transit is a good idea. It gives more coverage than relying solely on a carrier’s liability coverage. It helps mitigate the risks inherent with the shipping process.
Insurance pays to repair or replace the cargo whether or not the carrier is found liable.
Be sure to do your due diligence when it comes to freight insurance. Freight Insurance does not provide protection against all losses. You need to ask the questions of your carrier provider and be sure that there are no gaps in insurance coverage. Working closely with a performance shipping company will help you ensure that your shipments are protected while in transit.