Why should you shell out additional amount to reward for cargo insurance? The short answer is: because with that “extra” amount, you will be remunerated in case your cargo insurance gets lost or damaged. Nonetheless, let us define cargo insurance in a more technical way. Cargo insurance generally covers the lost or damaged, total or partial, of the goods that are the subject of the insurance coverage if such goods are damaged or lost while in transit and all other essential requisites are attendant. This sentence basically embodies the conditions before you can claim for your insurance proceeds. It is very important to note that not all and every kind of loss and damage on the goods entitles the owner of the cargo insurance policy to claim insurance proceeds.
The general key concept of Cargo insurance
These general concepts of insurance also apply to cargo insurance:
The claimant should have an insurable interest. Insurable interest is a question of law.
If it is unclear, ask the provider or underwriter what are the events or circumstances that are covered by the policy. This is vital. If the cargo insurance you purchased did not enumerate the cause of the damage, you cannot claim the proceeds of the insurance. To illustrate, if the loss was due to Typhoon Yolanda and typhoons, or “Acts of God”, or natural disasters were not in the list, you may be lost your cargo without compensation for your loss.
Cargo delivered of the cargo insurance
Filing your claim is also another vital thing to consider. Some may require that you should inspect your cargo upon delivery or within twenty-four hours.
This is important because you should buy cargo insurance that covers the segment of the supply chain when you are considered as the “owner” of the goods. This becomes very significant, especially for international transactions. Remember our basic concept – if not covered, not compensated. Two terms to note:
Cargo Insurance Provider versus General Insurance Provider
Will you prefer one over the other? Well, one may have the advantage over the other. While cargo insurance providers specialize on this field and so they are expected to be masters of their trade, it may also be equally attractive to avail of cargo insurance from a provider from whom you acquired some other types of insurance. You may avail of discounts for availing of multi-coverage. The decisive factor is whether your provider is knowledgeable about supply chain management and supply chain processes. Knowledge of this will give you more confidence that you are purchasing your cargo insurance from the right provider.
Mode of transportation covered of the cargo insurance
As mentioned earlier, if a particular situation is not covered by the terms written on the insurance policy, the loss of the goods will be “charged to experience” and that you cannot claim the proceeds of the insurance. So, before you buy an offer, check out what modes of transportation are covered. It pays to read all the contents of the cargo insurance policy, including the “fine prints” and ask clarifications for any doubt you have.
Cargo insurance is a comprehensive topic but it is worth to learn some basic principles so that when you buy one, you will be more confident that you can successfully claim the proceeds when untoward incidents will happen resulting to the loss of your goods.