Freight Insurance: Is your merchandise covered in the event of an unforeseen incident?

Many risks, including theft, and loss, among others, may occur to your goods, regardless of the method of transportation (road, rail, sea, river, or air).

These risks vary from normal incidents, such as; fire, to unusual ones (strike, theft, etc.). Both types are covered by the carrier’s civil liability, but also through an insurance contract signed by the person in charge of the shipment.

The exemption and limitation of liability for freight companies enable the shipper to insure their cargo. Discover different insurance solutions that will help you protect your freight flows, logistics strategy, and business.

What types of risks can be insured? Which insurance solutions are available for each method of transportation? News, standards, and advice, which you will find in this article, are related to the transportation of goods.

What Is Freight Insurance?

The insurance of goods concerns the transport company and its customers, as well as the shipper.

The carrier is generally covered, but there are exceptions where its liability is limited and framed. Thus, in the event of a claim, the shipper’s compensation is limited to the obligations set out in the international conventions. Once the carrier’s liability is established, the amount of compensation may be less than the value of the lost or damaged property.This is why most companies that use a freight company to transport their goods, opt for insurance to insure their shipments.

Depending on the method of transportation, there are several types of insurance:

Shipping: Shipping insurance can cover the ship and cargo against general risks (events that pose a danger to the shipment, and require financial sacrifices, such as; loss of part of the cargo), unforeseeable problems (theft, breakage, loss, etc.), and the risks of war throughout transportation.

Truck transport: In road transport, these vehicles are secured from one container to another.

Air transport: The goods are insured during air transport, but also during other complementary forms of transport, including road, sea, or river.

Inland waterway transport: The goods are secured from boarding until the arrival of the consignee.

The Risks

Regardless of the chosen transportation method (land, rail, sea, river, or air), goods are subject to many risks, such as deterioration, resulting in:

  • Normal risks: transportation accident, fire, or wetting;
  • Unusual risk: strike, theft, riot, an act of terrorism, or war.

It is therefore important to be properly insured and to define the scope of the risks covered.

The Responsibilities

In the event of a claim for damages, the consignee is not required to prove the fault of the carrier, which is deemed liable from the moment the loss or damage in transit has been proven. However, in national or international transport, there are cases where the carrier is exempt from any liability. The latter also benefit from limited liability: except in cases of serious or indefensible misconduct on their part, they are only entitled to partial reimbursement of the real value of damaged goods.

How to Setup Insurance

Freight insurance is an important part of your logistics strategy. To set it up, it is possible to contact a general insurer or a specialized insurance company. In all cases, different criteria must be determined, such as:

  • The main risks involved
  • Nature of the goods
  • Packaging method
  • Transportation method; primary and secondary
  • Number of packages, the weight of goods transported
  • An assured journey
  • The value covered: The insurance covers the real value of the goods in case of loss or accident. Value is a function of the cost of production of a good or its purchase or sale value, plus the expected profit.
  • Points of destination of goods
  • An insurance broker can help you select contacts, compare offers and find the right solution for your needs.

What are the advantages of freight insurance?

Freight insurance not only protects you against transportation risks but also provides compensation security. In case of damage, you may be compensated according to the real value of the goods, and based on any other commitments made.

In addition, the insurance of goods in transit protects goods throughout the journey, including intermediate storage.

In general, insurance companies offer “all-risk” formulas that cover all claims, or more limited coverage, covering only a few “events” listed in the insurance contract.

What information is needed to be provided to the insurer?

Among the different offers granted by a reliable logistics company, you must choose what suits you the best. For this, do not hesitate to express your needs to your insurer by listing:

  • The type of goods transported: weight, value…;
  • The mode of transport;
  • The final destination of the goods. Please note -the farther the destination is, the greater the risks.

ELITE LOGIX INC. is not just a Third Party Logistical Provider. We walk with you through all the stages of your shipping movements, from pick-up to receiving your merchandise. Thanks to our expertise, we are able to advise you regarding all matters along the road to insuring your goods.

We have the ability to add insurance endorsements in-house on a per shipment basis or on all shipments moving forward having the total value of your freight is covered, in case of a problem.

Contact our team for more details and to obtain a quote, including an insurance certificate for your next shipment.

Ask yourself a simple question, can you move without insurance? We can move and secure your shipment safely without any hassle.