We have all seen and heard it, all the news about the jet crashes and the burglary. There are news articles and pieces of the hijacking and even news about a ship capsizing because of bad weather or sometimes, even human error. When one reads all these news write-ups, they cannot help but think twice when it comes to shipping their own goods elsewhere. Nobody can blame them of course, because after all, it is wise to think twice before a bunch of your own cargo is being shipped to an entirely different continent with a fairly large amount of risk involved with it.
For these reasons, companies and governments have come up with a scheme that encourages the shipment of cargo despite the risk involved. This is what is called cargo insurance or shipment insurance. Refer to http://www.hkpli.com/cargo-insurance/ to know more.
What exactly is Cargo Insurance?
Just like how insurance is a scheme to protect or compensate for any losses that have occurred, as in the case of life insurance or health insurance, cargo insurance has the aim of keeping your cargo safe. Well, not literally “safe” because no one can protect anything from bad weather or general human errors but at least, it provides monetary or similar compensation in case of the loss of some items or cargo due to reasons like weather, ship capsize, jet crashes, etc.
For one to ship their cargo legally, it is necessary to have minimum insurance. This is called a carrier liability that protects the goods, when in transit, from weather, theft, or even breakage. The carrier liability is very minimum insurance which might not be the best for the shipment.
What are the limitations of it?
Yes, cargo insurance does have a few limitations, just as every single insurance policy does. For example, if the cargo is being shipped by a truck, then the insurance does not include any motor carrier policy. This means, that any loss will not be compensated for. Many cargo insurance policies claim to be “all risks” “broad form” but the truth is, none of the policies are fully equipped to truly compensate for the losses and damage that can occur.
Types of Cargo insurance
Cargo insurance can be for domestic or international levels too. The types of cargo insurances are:
- Land cargo insurance: This includes coverage for all land shipments, and is generally domestic in nature that means, it is valid in the geographical borders of the country
- Marine cargo insurance: This covers shipment either through air or sea. This means that it covers international borders. http://www.gtuhk.com/#!pli-eng/cesg provides some international cargo insurance.
As you might have guessed, cargo insurance is a necessary tool for any shipment whether domestic or international. Get your hands on insurance if you are planning to send any cargo!