Cargo insurance is now more of a necessity than a luxury. If your business relies on shipping, you must request a cargo insurance quote from any reputed insurance company and get covered.
In this article, learn how to get insurance quotes and some things you should know about the quotes.
Why Do You Need Cargo Insurance?
Legally speaking, all the cargo carriers must get insurance coverage, which is carrier liability. If your shipment goes missing, damaged, or delayed, they can use it to compensate for your loss. But in most cases, it’s limited and insufficient.
So to protect against such losses, it’s recommended that you get cargo insurance coverage of your own.
Cargo insurance is no different from other types of insurance policies. You sign up for a plan and pay the premiums. In return, the insurance company will protect you from financial liabilities if anything goes wrong.
A loss, theft, or delay can be detrimental to businesses whose revenues depend on delivering a single container. But in international or national transportation, such incidents are more common than you might realize.
Quotation Depends on the Type of Cargo Insurance
When you request a cargo insurance quote from insurance companies, you’re likely to get different quotes. That’s because there are different types of cargo insurances. Those are:
- Single Coverage
This type of insurance coverage is based on per shipment basis. You should get single coverage if you ship goods infrequently but in large amounts.
2.Open Coverage
Open coverage plans cover your goods for a specific period, which can be a month, a year, five years, or any time frame.
3. All-Risk Coverage
This type of insurance provides coverage for all loss-making events that can take place during the shipment process.
You should get the all-risk coverage if you’re frequently shipping new items that are not vulnerable to spoilage or breakage.
But not all events are included in the coverage. This includes negligence, customs-related delays, cases involving WSRCC, loss due to the act of God, etc.
4. Named Perils Coverage
As opposed to all-risk insurance, named perils insurance policies cover specific events only. So you need to name that specific event that you think will pose the most threat. It can be an act of God, theft, bad weather, or non-delivery.
The quotation will be different for each type of coverage.
How is Cargo Insurance Quote Calculated?
When calculating the cost of insuring your goods, the companies take various things into accounts, some of which are:
- Shipment value
- Cost of freight
- Distance
- Risk involved
- Type of cargo insurance
- Extra expense percentage
The cost increases with the value of the shipment, cost of freight, and distance. If the company determines you to be riskier, then expect a higher premium.
Quotes are Not Absolute
Finally, you should know that the quotes you receive are not fixed. So by the time you decide to select the policy, you may be paying more than what the company quoted you.
Inflation also plays a significant role in the insurance industry. So over time, you may pay higher premiums.
When getting a cargo insurance quote, work with reputed agents who have significant experience in the industry. The right insurance policy will protect your business better.
