When preparing to have freight shipped to another destination, it is important that the cargo is covered by insurance as a fail safe should anything untoward happen while your goods are in transit. To this end, there is a special form of freight forwarders insurance that is available to cover you.
Here are the instances that a good insurance policy will cover:
Damaging bad weather conditions, accidents in transit, motor accidents by carriers, rough handling by carriers and many other common hazards to many forms of cargo make the need for insurance an important and peace of mind protection for all exporters.
If the terms of sale of any goods make the exporter responsible for insurance, then the exporter is bound to either obtain its own insurance policy or insure the cargo under a special freight forwarder's policy for which they may charge a fee.
However, if the terms of sale instead make the foreign buyer of the goods responsible for their condition, the exporter should not make the assumption (or for that matter take the buyer's word) that correct and adequate insurance has been obtained.
It is worth noting that if the buyer of the goods neglects to obtain adequate insurance coverage, then damage to the goods may in some instances cause a major financial loss on the part of the exporter.
Shipments made by sea are covered by special marine cargo insurance. Air shipments of certain cargos may also be covered by similar marine cargo insurance or alternatively, freight forwarder insurance can usually be purchased from the air carrier.
Export shipments of freight are generally insured against any loss, damage or delay in transit by the cargo insurance.
International agreements will frequently limit carrier liability. In addition to this, the insurance coverage is substantially disparate from standard domestic coverage. Arrangements for freight forwarder insurance can be made either by the purchaser or the vendor, in accordance with the particular terms of the sale. Exporters are generally advised for their own protection to consult with international insurance carriers or the main freight forwarders for more relevant information.
While vendors and purchasers may agree on various different components, insurance coverage value is usually placed at 110% of the cost, insurance, freight (CIF) or carriage and insurance paid to (CIP) value.
We trust this article was useful to you.
Comment by: Carl
Thank you for a highly informative post which will come in useful when I intend to move some goods of my own in the near future and will need not only the services of a reputable shipping company but also will need to reassured that the carriers insurance is adequate to cover every eventuality of the move.