Pro Tips

When Was The Last Time You Reviewed Your Cargo Insurance Plan?

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
  • Theft
  • 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.