Why do you need Cargo Insurance?

In the shadow of the Evergiven incident in the Suez Canal surprise has been expressed by analysts as to the lack of cargo insurance purchased by cargo owners.

Statistics show that the vast majority of cargo travels uninsured with cargo owners relying on Carriers &/or Freight Forwarders for compensation. Using their Standard Trading Conditions and/or Bills of Lading, the Carriers &/or Freight Forwarder can limit their financial responsibility to the Cargo Owner frequently resulting in a dissatisfied Customer. It is estimated by Insurers that over half of goods transported around the globe remain uninsured.

A little known free cover provided by Cargo insurance is that of General Average. All Cargo Insurance policies automatically include General Average cover which can be particularly useful in the event of an incident such as that in relation to the Evergiven. Maritime Law dictates that should a marine venture come into problems such as through high seas or an extraordinary maritime event such as grounding the line can declare General Average and every cargo owner with cargo on-board the vessel must contribute financially to the loss incurred by the vessel owner or indeed other cargo owners such as in the event of jettison. The Master of the ship has the right to hold cargo until such time the financial contribution has been received from the other cargo owners or a guarantee for the same has been received from a company of significant financial standing.

Cargo insurance is usually sold an ‘All Risks’ basis covering many of the eventualities expected by Importers/ Exporters. The cost of cover is remarkably cheap when you consider the potential financial risk without it. This makes Cargo insurance, in most cases,  pound for pound cheaper than Household Buildings insurance and you wouldn’t do without that would you? Cover is simple to arrange and can be purchased in just a few clicks. The Insurance Broker Limited has recently updated it’s website making the route to cover simple and affordable.