There is always a chance of goods getting damaged while they are being transported from one place to another. That is the reason why most businesses choose to insure their goods while they are in transit. Cargo insurance policy is purchased to insure cargo against any damage or loss while they are being transported by sea, land or air.
Since cargo may be transported from one continent to other, the types of policy covers will differ from nation to nation and the type of shipments. Cargo insurance can be classified under following categories
- Truck cargo: All the shipment made across land is covered under truck cargo insurance. This policy provides coverage for theft, damage and other perils.
- Marine cargo insurance: Goods transported via sea is insured under marine cargo insurance which protects against damage due to weather and during loading and unloading of goods.
- Open cover policy: This type of cover is beneficial to those who ship frequently. The terms and conditions of the policy are decided by the insurance company and the insured and are later declared to the insurer.
- Voyage policy: This policy provides coverage for a particular voyage and expires once the voyage is complete. It offers coverage from the time the cargo leaves the specified origin, while it is in transit and until it reaches the specified destination.
- Contingent policy: This policy acts as secondary insurance. A contingent policy will pay for losses when the responsible party denies liability for a loss.
The type of insurance policy and insurance rate will depend on a number of factors such as type of cargo being transported, value of cargo, route taken to reach the destination and many others. One should obtain multiple quotes for cargo insurance and then choose the insurance company. The policy chosen should be such that it minimizes the business’s exposure to loss and provides the exact coverage the business needs.
