Why have Carriers Insurance to Insure Your Freight?
When it comes to carriers insurance, you may ask yourself why insure your freight, especially when it is being transported overland. Well, there are plenty of goof reasons why you’d have carriers insurance to insure your goods and this post will get to the bottom of them
When it comes to shipping a product, its easy to automatically assume that the transport carrier is completely liable for any loss or damage to your goods while they are in their possession. This is not always so. Even when the greatest care and attention is used, freight cargo is always subject to plentiful risks while it is being transported which involves several factors.
- If the goods are not packed appropriately for the method of transportation
- An accident could occur either at the port or even during transit.
- The cargo is could go missing at a terminal
- Cargo could be jettisoned overboard if necessary to save the vessel or aircraft
- The vehicle could be stolen along with its load
Sp you see there is a risk involved when transporting cargo even if its just to the other side of town. So regardless of the mode of transport, the owner’s goods are transported at their risk and not the carrier’s. This is a principle which is thousands of years old. It still holds true today. But its not the end of the story.
Carriers do carry their own insurance but this is limited. It is not necessarily intended by the carrier to transfer all of the risks to themselves. When you have goods transported, it is expected that all importers and exporters are responsible enough to undertake adequate carriers insurance to cover all eventualities such as damage, loss, theft, acts of god, war and general averages although be aware that this is not mandatory.
Some cargoes can be uninsurable depending upon their nature or they could be subject to prohibitively high premiums, deductibles and restrictions. This is because insurance companies do not like to insure risks that are more likely to actually occur. So companies and cargo owners are generally required to ensure they take the initiative and go the extra mile in order to reduce or minimise loss or damage. This can be done by using special containers, additional bracing, ensuring correct packing, or even making an informed choice of the safest route.