Questions to ask before purchasing cargo insurance

cargo insurance

The end goal for all businesses is the maximization of profits. As such, protecting your shipment from losses due to theft, accidental damage, or natural disasters is of prime importance and will have a major role to play in improving or deteriorating your profit margins. Thus, cargo insurance will help to cover these unexpected losses so that you remain covered in all scenarios.

However, there are certain questions that you need to ask before buying cargo insurance to be sure that you are getting the right insurance. In the following sections we will look at some of these questions you should have answers to from freight companies before purchasing cargo insurance.

Is an insurance provider well-versed with supply chain management?

You should ideally purchase cargo insurance from someone who has experience in different transportation modes, international movement of goods, and customs brokerage. This way you will have the assurance that insurance providers will be able to offer overall protection for your goods.

What is the time allowed to report damage to a shipment?

It is possible that a shipment’s packaging remains unharmed after it arrives at the destination. However, after opening it you may find that the goods inside have been damaged or broken. In such a situation you should want to have a cargo insurance plan which will allow you to file your claim after you discover the damage, even when it has been weeks after the shipment arrived.

You will find cargo insurance providers only allow a few days for discovery of the damage and filing of the claim. Thus, your aim should be to find a provider that allows up to thirty days for reporting damage after the shipment reaches its destination.

Will my shipment require contingency coverage?

Being an exporter, it is likely that you will have decided upon certain terms and conditions with buyers. In this case, goods get damaged during transit and the buyer has already taken ownership of the shipment according to terms of the sale, it is possible that the buyer may refuse payment for goods which have been damaged.

In this situation, you may attempt to enforce your sales contract, but oftentimes it would be difficult to enforce. As such, when taking cargo insurance you can include contingency coverage and cover for shipments.

What is open policy coverage?

If presently your shipments are insured by providers of freight forwarding services as single container at a time, then it will be useful for you to consider open policy coverage for your shipment. This kind of coverage will help you in saving money by offering detailed insurance policy that helps to protect all of the goods during transit. By evaluating the volume of your shipment you will be able to analyze whether open policy coverage will help you save money.

To conclude it can be said that cargo insurance can help in protecting you from losses when any contingency arises. But, you will have to analyze all the aspects to make the right selection and have the assurance that you will not have to face losses while sending your shipment by dry van or any other method.