A Cargo refers to goods carried by a large vehicle, like a plane, ship, train, or truck. Cargo originates from the Latin word carricare which means “to load on a cart or wagon.
Insurance refers to an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.
What then is Cargo Insurance?
Cargo insurance is the method used in protecting shipments from physical damage or theft. Insuring cargo ensures that the values of goods are protected against potential losses which may occur during air, sea, or land transportation.
It is important to note that cargo insurance is different from freight insurance.
Freight insurance is one of several costs that will be included in your shipping quote. Freight insurance only covers the freight forwarder or logistics provider against claims arising from their mistakes and/or negligence.
It is cargo insurance that protects you, the customer, and the value of the goods you wish to ship. You should therefore not rely on freight insurance to cover the value of your consignment.
Even if your forwarder’s action or inaction results in loss or damage to your goodsin-transit, compensation provided by freight insurance is likely to amount to a mere fraction of their worth.
As a business person who conveys goods through the sea and probably through other methods, it is important that you have an understanding of the benefits of cargo insurance and how it can reduce the risk of loss for you. You are at a huge risk when you ship your items without insuring them.
The following are some of the perils and damages are covered under cargo
• Vessel collision
• Vessel sinking
• Bad weather
• Theft e.t.c.
10 benefits of cargo insurance for your business are:
• Cargo insurance protects you from financial loss arising from damaged or
• Your cash flow is protected.
• Peace of mind that every shipment you have is insured
• You are insured for the full value, including any profits if necessary
• Coverage is placed on the right conditions, with terms that you have
• Your interest is insured while you are financially at risk
• Local and professional claims service means prompt and efficient claims
• Minimal paperwork and simplified reporting, etc.
So just before you ship your next cargo, do make sure you have a cargo insurance
protecting you from any form of loss