Cargo Insurance and Coverage for Shipments
For businesses planning to transport items overseas, it's important to know that the vessels and companies that own them are insured. If anything were to happen to the ship and the cargo is lost or damaged, the business wants to be sure that there is sufficient insurance coverage. As with all industries, the shipping industry has special underwriters to protect them in the event of a problem. These various coverages include basic marine as well as cargo insurance.
When an insurer provides cargo insurance coverage, it typically does some background research on the company. Inquiries include the different factors that can provide varying levels of safety and efficiency.
Areas of Travel
One area of concern is the planned areas of travel of the vessel. Crossing international waters, probable destinations and the types of seas encountered are one factor. The climate conditions in tropical ocean areas, for example, might be an issue during hurricane season, which stretches from June to November, but not so much in the springtime. Areas that are heavily traveled by pirates may be more prone to higher risks and rates. Runs up and down a river or the coast rather than trans-oceanic trips are another consideration.
Commodities
The type and nature of different commodities can affect a vessel's cargo insurance. The volume and frequency of carrying the items is also significant. Perishables, for example, are more at risk for complications.
Customs
Depending on the location of the delivery of the shipment, the vessel may have a difficult time getting the goods offloaded. In some cases, they can be delayed by customs or poor political relations. Items that don't pass specific regulations of the country may not be allowed to pass through the customs areas and cross the borders.
Ports and Facilities
One of the concerns that underwriters have for cargo handling is the condition of the facilities and the port itself. An old, rundown dock and equipment that tends to break down or malfunction could have an adverse effect on the timeliness of the cargo's arrival. State-of-the art port and cargo handling facilities create a smaller risk that something will go wrong.
Exclusions
In some cases, it's more a matter of what is not covered under the marine insurance or cargo insurance policy than what actually is covered. Things that might be excluded include poor packaging, which creates a problem with spoiled perishable goods, or an infestation to items such as wood.
When an insurer provides cargo insurance coverage, it typically does some background research on the company. Inquiries include the different factors that can provide varying levels of safety and efficiency.
Areas of Travel
One area of concern is the planned areas of travel of the vessel. Crossing international waters, probable destinations and the types of seas encountered are one factor. The climate conditions in tropical ocean areas, for example, might be an issue during hurricane season, which stretches from June to November, but not so much in the springtime. Areas that are heavily traveled by pirates may be more prone to higher risks and rates. Runs up and down a river or the coast rather than trans-oceanic trips are another consideration.
Commodities
The type and nature of different commodities can affect a vessel's cargo insurance. The volume and frequency of carrying the items is also significant. Perishables, for example, are more at risk for complications.
Customs
Depending on the location of the delivery of the shipment, the vessel may have a difficult time getting the goods offloaded. In some cases, they can be delayed by customs or poor political relations. Items that don't pass specific regulations of the country may not be allowed to pass through the customs areas and cross the borders.
Ports and Facilities
One of the concerns that underwriters have for cargo handling is the condition of the facilities and the port itself. An old, rundown dock and equipment that tends to break down or malfunction could have an adverse effect on the timeliness of the cargo's arrival. State-of-the art port and cargo handling facilities create a smaller risk that something will go wrong.
Exclusions
In some cases, it's more a matter of what is not covered under the marine insurance or cargo insurance policy than what actually is covered. Things that might be excluded include poor packaging, which creates a problem with spoiled perishable goods, or an infestation to items such as wood.
Source...