Why should I consider purchasing Cargo Insurance?

The fundamental reason is simple – peace of mind. Cargo Insurance ensures reimbursement for actual losses or the “Stated/Declared Value” of your goods, offering a safety net according to the terms and conditions of your chosen policy. It’s crucial to insure the full value of your cargo to avoid proportional claim settlements in case of under-insurance.

What’s the rationale behind paying extra for Cargo Insurance?

The cost of cargo insurance is a minor fraction compared to the overall expenses of packing, shipping, and handling. Without insurance, compensation for damages or losses is minimal. For instance, without Cargo Insurance, truck or ocean shipments might only yield $0.50 per pound for damaged items or a fixed $500.00 for an entire ocean shipment, as mandated by law. Air shipments follow a similar pattern with specific compensation limits.

Are there consequences for not having Cargo Insurance beyond financial loss?

Absolutely. The ancient concept of “General Average” dictates that survivors of a voyage compensate for the losses incurred by others. Cargo insurance under the minimum “Institute Cargo Clauses C” or better is crucial to cover General Average claims. Without it, you might be compelled to post a substantial amount during lengthy court proceedings.

What does Cargo Insurance cover, and how does it work?

It depends on the policy you choose. Cargo Insurance is a contract with Standard Conditions, Special Conditions, and ICC Cargo Clause wordings. ICC Clauses A provide extensive coverage, excluding specific exclusions like War & Strikes. Combining ICC A with War & Strikes coverage creates “Full Cover” or “All Risks.” On the other hand, ICC Clauses C offer more limited coverage, including General Average claims but excluding partial losses, damage, or theft unless caused by “named perils.”

In summary, understanding the intricacies of your chosen insurance policy is essential. Read and comprehend the terms to make an informed decision that not only protects your cargo but also ensures peace of mind throughout the shipping process.