Insuring Your Freight – Important Considerations
For many businesses, stock or equipment must be stored or transported between various locations, sometimes over very long distances and by third party service providers. In these situations, cargo insurance can be arranged for necessary protection of your goods, either on an annual basis or for a single trip.
Any business that imports or exports goods internationally or transports goods in the UK or overseas can benefit from having the right cargo insurance in place, limiting the impact of damage, loss or theft of your goods on your businesses.
Firstly, there are some primary considerations worth making before you even start looking for different types of cargo insurance. Having these in mind when browsing online or talking with brokers can save you time and money.
1) How is Your Cargo Categorised?
It is imperative to know the properties of the cargo to be insured including the manner in which it is to be packed. Packing is vital as it is this which protects the cargo during the voyage and stops items from dislodging, falling, smashing during the transportation process.
Different insurance companies will have different costs and requirements depending on the type of goods you need them to insure and the way they are packed.
2) Understand the Route and Transportation Method
Route and transportation method will heavily influence the kind of insurance policy you need and the costs of general cargo insurance. This includes more than just which port to which port the cargo is to be moved. You should also know the various stages involved in the journey as well as the climate conditions of the locations your packages will travel through.
All these things will impact the level of vulnerability or danger your items face when moving from point A to point B. If there are any political situations which can affect the safe delivery and/or payment for the cargo, this will impact the cost of your cover. Proximity to any piracy hotspots is obviously a major aspect to consider.
3) Specific Cargo Clauses
Each policy will come with different clauses and details. There are also clauses specific for various trades, such as frozen meat, frozen produce, timber, coal, and oil to mention a few. It’s always worth seeking professional advice from someone in the industry to review the various details of potential policies before you take them out. Misinterpreting details could leave you exposed.
Questions to Ask Yourself when Buying General Cargo Insurance
When you’re reviewing different cargo insurance policies, you may not initially know the kind of items you’ll want to be included in your cover. It’s not uncommon for businesses to take out a policy that doesn’t 100% protect their items throughout the whole journey.
Similarly, there are various actions shippers can take themselves to offer their items more protection and reduce the cost of their shipping premium.
The Weight and Value of Your Goods
Standard freight liability insurance is calculated based on the weight of your shipment. However, if you have light but high value cargo there could be a gap in insurance cover which you’ll need to address with your provider.
Some fragile items may be excluded on your freight forwarders general liability insurance, so it’s best always to check so you can upgrade your cover or choose another provider who gives all your products the protection they need. For instance, expensive machinery, solar panels, antiques, items containing glass are at greater risk of damage and must always be professionally packed for export.
Who Is Packing Your Goods?
Shipping cargo to another country often involves multiple movements and handling of the same shipment. From an insurer’s perspective, items that are well packed in wooden crates and well protected are going to be lower risk than small loose cardboard boxes.
Want to Know More?
If you want to know more about the process of taking out general cargo insurance for your freight, get in touch with us at the Insurance Broker today!