What is Cargo Insurance & Why is it Important?

If you are shipping cargo, you will want to explore all your options for insurance. This blog post is meant to help you understand the basics of cargo insurance, why it’s important and to help you decide if it’s the right option for your cargo shipment.

What is Cargo Insurance?

Cargo insurance offers protection on the goods you are shipping in the case that anything is damaged, lost or stolen during the trip. Because there are so many uncontrollable elements that could impact the shipment of cargo, it’s important to have coverage in case something were to go wrong. You won’t be able to fully guarantee protection of your goods but cargo insurance can help you protect the value of your goods.

It is similar to other types of insurance you are probably already familiar with such as auto or home insurance. It typically covers certain types of damages or loss but each plan can be different so make sure you consult with your logistics manager to be clear about the cargo insurance that would be best for you. More often than not, cargo insurance is the best way to mitigate risk when shipping your cargo.

Is Cargo Insurance Required?

There is no law necessitating that a client purchase cargo insurance, unlike other types of insurance you may be familiar with. The decision whether or not to insure your cargo is ultimately up to each individual, using their own discretion and the recommendations of their logistics manager.

How Much Does Cargo Insurance Cost?

Cargo is insured for a dollar amount akin to its value so in the case that something happens to your cargo, you are compensated and able to replace the lost goods. The times that cargo is damaged or lost, it is most commonly due to a natural disaster, vehicle accident, theft, or rejection at a customs site. While each of these elements are closely monitored and ample precautions are taken to minimize the possibility of complications, these situations do happen and cargo insurance is here to protect you accordingly.

Why is Cargo Insurance Recommended?

Most logistics managers and anyone who works in the shipping supply chain would recommend purchasing insurance when you are moving cargo because it covers you completely if and when something might go wrong. Often times, customers will not need to use the insurance they purchased but it is recommended because the cost will be well-worth it if anything were to go wrong. Liability can also be hard to prove, as cargo is moved around to so many different places and through so many hands throughout it’s shipment, it can be very hard to nail down where an issue occurred and who is to blame. If you purchase insurance however, you will be covered regardless of what went wrong and whose responsibility it was.

How Do I Get My Cargo Insured?

There are many options for insuring your cargo. Talk to your trusted logistics manager so they can arrange the best option for you based on the value of your cargo and your budget.

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