Cargo Insurance and Claims

International logistics involves the transportation of goods across borders, often involving multiple modes of transportation and numerous parties. With such complex and varied logistics, the risk of cargo damage or loss is always present. That's why cargo insurance is crucial in international trade.

What is cargo insurance?

Cargo insurance is a type of insurance policy that protects goods while they are being transported, whether by sea, air, or land. It covers damage or loss caused by various events, such as accidents, theft, natural disasters, and other unforeseen circumstances that may occur during transportation.

Types of cargo insurance

There are several types of cargo insurance policies available for international logistics, including:

All-risk insurance: This type of policy provides the broadest coverage and protects against all risks, except for those explicitly excluded in the policy.

Named-peril insurance: This policy covers only specific risks listed in the policy, such as fire, theft, or collision.

Total loss insurance: This policy covers the entire loss of the cargo, rather than just the damage or loss caused by specific events.

General average insurance: This type of policy is commonly used in maritime transportation and covers the cost of shared losses among all parties involved in the shipment.

Cargo claims

Despite taking measures to protect goods during transport, accidents can still happen. In such cases, filing a cargo claim is necessary to recover any losses. A cargo claim is a formal request to the carrier for compensation due to damage or loss of cargo during transport.

The carrier's liability for cargo damage or loss is determined by international conventions and national laws. Generally, carriers are liable for damages caused by their own negligence or that of their employees or agents. However, carriers are not liable for damages caused by circumstances beyond their control, such as natural disasters or acts of war.

Tips for cargo insurance and claims

Here are some tips to ensure proper cargo insurance and claims handling:

Work with a reputable insurer and broker who have experience in international logistics and understand the specific risks involved in your shipment.

Ensure that the insurance policy covers the specific goods being shipped and the mode of transportation.

Maintain accurate and complete documentation of the shipment, including the bill of lading, packing list, and insurance policy.

Inspect the goods upon receipt and note any damage or discrepancies on the delivery receipt.

File a cargo claim promptly with the carrier, providing all necessary documentation and supporting evidence.

In conclusion, cargo insurance is a critical component of international logistics, protecting goods from unforeseen events during transport. Knowing how to properly insure and file claims for cargo can help mitigate risks and ensure a smooth and secure logistics operation.