The Principles Behind Marine Freight Insurance
Cargo insurance, or marine freight insurance, is essential for businesses engaging in international trade, especially those shipping large quantities of goods by ship or boat. Be aware of the fact that specific terms and benefits vary widely across the world and many cargo policies are custom tailored for shipments of a specific nature, but all in all, a few general principles apply when talking about the industry as a whole. Doing international shipping can be quite an adventure, but it can also come with some difficulties.
The players involved
The process of international shipping usually involves many people and companies, and it helps if you understand how they work together. You are, of course, the “shipper” or “exporter,” responsible for providing the proper paperwork, the import duties, and the goods themselves. The shipping company you choose will be your “move manager”. They will oversee your shipment, it’s the company you’ve contracted to do so, and will be sending you your bill upon completion. They’re the ones to turn to in the event of any claims for damages, updates on your shipment, and general questions about the process. All of the other entities involved with your shipment will be either be “employees” or “subcontractors” of the international shipping company.
There are different policies that are available to protect those valuable goods you’re having transported from port to port on a shipping vessel, because loss or damage can occur while the ship is in port, while the goods are in transit to the warehouse, or even while sitting in the warehouse.
Buying certain marine freight insurance policies, which can be endorsed to cover all these instances, is often the right decision, since you likely stand to take a significant loss without coverage for every scenario, or a policy can be purchased individually to provide cumulative coverage for all locations of your goods.
Protecting the value of your goods is the primary benefit of marine freight insurance. While you have the option of sending your freight without any insurance, by doing so, you would have to bear the entire financial cost in the event of damage or loss of your shipment. While you do have legal recourse against the carrier, this can result in a lengthy and complicated process, and in some cases international law can strictly limit carrier liability.