When was the last time you reviewed your cargo insurance plan?
Many companies don’t realize that they may be over-paying for insurance and not getting the coverage that they expect. In other words, they are assuming more risk.
If you are shipping at least $300,000 worth of goods, with at least one shipment being overseas, you should consider an All-Risk annual marine insurance policy.
Why? All-Risk insurance is more cost effective than Shipment-by-Shipment. If you are using Shipment-by-Shipment insurance, the cost can range from $0.30 – 0.60 per hundred dollars of coverage. While the cost all-risk annual policy can be $0.20 per hundred dollars of coverage.
From a coverage standpoint, Shipment-by-Shipment insurance most likely does not cover:
- Acts of God, i.e. heavy weather, tsunami, earthquake, fire, etc.
- Acts of war, i.e. strikes, riots, piracy
- Latent defects in the hull or machinery
- Criminal acts or negligence by the crew
- General Average
Benefits of All-Risk insurance are:
- Easy to manage and administer – written once a year
- Covers any physical loss/damage from any external cause, including the items not covered by Shipment-by-Shipment insurance (Acts of God, theft and General Average)
- Continuous coverage – overseas, domestic transit and while in the warehouse
- Local representation – an American insurance company – not a foreign based company in China for instance
If you don’t know how to get started to assess your cargo liability situation – please contact your logistics solutions provider for assistance. Follow this tip and you’ll manage your risk better when shipping your products or equipment.