What is Cargo Insurance?
Cargo insurance is one of the world's oldest types of insurance; its origins go back to the ninth century with the beginning of the use of marine transport and the enormous risks faced by the cargo on its way to the destination point at that time.
Even now, with the developed technology and improvements that have taken place in the maritime transport sector, not only maritime transport, but also any other method of transport, may face certain risks during the journey to the delivery point.
Given the interest of traders and the volume of transactions in global trade today, it is worth mentioning cargo insurance as one of the important ways of avoiding any potential risks that might arise.
But there is a question that always comes to mind when thinking about how to avoid the hazards that might arise.
Isn't the carrier responsible for the safety of your cargo?
From the legal point of view, the carrier is only liable for the defects incurred by the carrier which affect the goods; in other words, the carrier is not allegedly liable for any loss or damage incurred by the goods on their way to their destination, unless that defect has occurred on its side.
From the legal point of view, the carrier is only liable for the defects incurred by the carrier which affect the goods; in other words, the carrier is not allegedly liable for any loss or damage incurred by the goods on their way to their destination, unless that defect has occurred on its side.
Traders therefore always obtain cargo insurance to protect their goods from loss, damage, or theft while it is in the purchasers' way.
Cargo Insurance Coverage
Through its various types of policies that vary in the covered risks that could occur, Cargo Insurance provides you with the required coverage.
That all depends on your demand and the products shipped. We will mention the types of cargo insurance policies below for further clarification.
Cargo Insurance Types
When you choose to insure your cargo against risk, and when you try to choose the right insurance policy, you need to know that this depends on the product you are going to deliver, its properties, whether packed or not, can be broken easily, if it is going to be transferred on land or by plan or shipped in a container by a vehicle.
This helps to choose the correct insurance policy for cargo, as there may be a definite insurance policy for the type of commodity you supply.
The types could be classified into:
Land Cargo Insurance: A type of insurance that provides coverage for the transport of cargo by means of vehicles or any form of land transport.
It provides coverage against harm or theft or other risks associated with it.
Marine Cargo Insurance: This is the type of insurance that provides cargo coverage provided by any method of transport that uses the sea or air, such as ships and planes.
It provides coverage even during the loading or unloading process against any damage that occurs to the products.
Not only is the coverage provided in one country, but it provides this coverage globally until the product reaches its destination safely.
There are 3 types of insurance policies offered by most insurance companies that provide cargo insurance under these insurance types.
Open cover cargo policies:
The policy provides you with coverage for various consignments.
For the open cover cargo policy, there are 2 types:
1. The renewable policy
It is produced for a definite value and when the definite value is consumed, it needs renewal.
2. The permanent policy
It is the policy that provides you with the coverage agreed for the shipments numbers in that period for a specific period without limit.
Specific Cargo Policies: a single shipment policy that is always used by small traders or by a normal person who transfers certain commodities for his or her own use.
Contingency Insurance Policy: Contingency Insurance Policy: the type of policy used by the seller in the event that the customer is responsible for insuring the goods against the loss or damage that may occur to the delivered goods. The insurance cover is taken out by a party as an international transaction against the insurance cover taken out by the counter party.
