Temperature Concerns and Marine Freight Insurance
Having marine freight insurance helps to cover any loss and/or damage of cargo while it is in transit between the points of origin and its final destination. Goods covered by this policy may be transported by sea, air, or land. Cargo insurance is essential for businesses engaging in international trade, especially those that ship large quantities of goods by motor carrier.
Specific terms and benefits vary widely across the world and many cargo insurance policies are custom tailored for specific shipments, however a few general principles apply to the entire industry. While shipping goods internationally is safer and more efficient than ever, there are still numerous reasons freight could be damaged in transit.
The importance of understanding your policy
A common mistake when reading an all-risk insurance policy is to assume that the policy will automatically cover any accident involving your goods. This is not always necessarily the case. Make sure you understand the language in your policy, since many all-risk policies lay out a specific set of situations in which they do not cover the goods. Occurrences not listed there should be covered under an all-risk policy.
Global shipping makes cargo vulnerable to the consequences of temperature extremes. Oftentimes a shipment ends up going from an extremely cold region to an extremely hot one, or vice versa. Many products can end up being ruined, damaged, spoiled, or otherwise compromised by this occurrence; some could be in danger of being underinsured by their marine cargo policies.
Also vapors in containers during times of extreme heat can suddenly turn into moisture or a mist of condensation as the sun goes down and temperatures cool. Some cargo insurers have been known to add temperature extreme coverage back in exchange for a small additional premium. Claims resulting from temperature extremes are often for total or near-total loss and can be potentially devastating to cargo owners.
Honesty is the best policy when it comes to marine freight insurance. Anyone that is seeking coverage must disclose to the insurance company all pertinent information, such as the type of item, dollar value, mode, and any other material facts that could influence the underwriter in their assessment of the risk. Speak to a knowledgeable agent about any questions or concerns related to this service.