It is not easy to avoid any possibility of traffic incident during transportation of the cargo, e.g., road accidents, failure of fasteners and other unfortunate incidents. The shipping company is liable for your freight, however there are many aspects to consider. Therefore, in order avoid any loss, the best solution is to arrange a cargo insurance. Below we will describe the insurance process and how CHEMTRAILS TECH DMCC can help to insure your cargo.
In transit process from point “A” to point “B”, the cargo carries a big number of risks. A transport vehicle – land, sea, air – may get into car accident, crash, sink. The cargo can get wet, deteriorate, it can be stolen, detained and confiscated at customs. In order to get a compensation for the damaged or lost cargo, the cargo must be insured in order to avoid the above-mentioned risks.
The major objectives of cargo insurance are:
• property security assurance;
• protection of cargo owners;
• control of insurance situation;
• management of insurance cases – a compensation for losses to cargo owners in the event of insurance situations.
In accordance with the current legislation, cargo insurance is not obligatory in freight forwarding. Nobody forces cargo owners to insure their cargo, since it is voluntary.
Which cargo may be insured
Almost all types of cargos and transportation types are subject to insurance. Everything may be insured, from petroleum products to glass/ crystal ware. Types of cargo insurance are also classified according to the method of cargo transfer. Each method has its own characteristics, as described below.
Type 1. Air Transportation Insurance
Air transportation – the latest and most high-potential type of transportation. The main advantage of this type is high speed delivery. The specialized boards, cargo aircraft with increased capacity, are used for large objects or equipment.
Despite the scepticism of some citizens, this type of transport is considered as the safest by the insurers. The probability of deterioration or loss is minimal, while insurance risks are low. However, there is a risk of theft for some cargo categories (expensive office equipment, electronics). The cargos most often get lost at intermediate points of transportation on its way to the final destination.
Type 2. Marine Transportation Insurance
Marine transport history goes back into past centuries. The word “cargo” was used by the Spanish for marine transport, hence giving a start to its usage in international designation of cargo.
Marine transportation is associated with a lot of risks: cargo may be damaged while loading and offloading, the cargo integrity and its timely delivery strongly depends on weather and storage conditions. But in some situations, marine transportation is the only way to deliver cargo to the point of destination. This is especially related to foreign trade between countries. Grains, machinery, cattle and much more are being transported by water.
Cargos transported by sea/ocean are being insured either fully or in part depending on the route difficulty, its distance and other factors. There is a lesser risk of theft, however there is a high probability of goods getting wet and damaged as a result of sea water getting on board of the vessel.
Type 3. Railway Transportation Insurance
Hundreds of tons of industrial and commercial cargos are being transported by rail every day. This type of transport is especially popular around the world due to ability to overcome long distances between the regions at relatively low cost.
Railway transportation risks are low:
• cargo damage as a result of derailing or unsuccessful maneuvers;
• loss of container integrity;
• damage due to weather conditions;
• theft
Railway cargo insurance is a hence a rare type of insurance, since this method is most often applied to the goods not requiring special protection – crushed stone, ore (mineral), coal, wood.
Type 4. Road Transportation Insurance
Road transportation is associated with the highest risks. A large number of accidents and other situations involving damage, spoilage and theft of cargo occur on the roads. There is a high probability of fraud, forgery, falsification of documents and other illegal acts.
Insurance of one-off and recurrent transportation services
Validity terms of insurance contracts may vary. Respectively there are one-off and recurrent types of cargo insurances. The one-off transportation is a regular type of insurance with the validity period of 30-60 days from the moment of the funds transfer to insurer and is applicable to one specific transportation case.
For the insurance of periodic deliveries, one contract (usually an annual one) provides a protection for homogeneous consignments. In this case, the policyholder is obliged to inform the insurer about the next transportation, and the insurer, in turn, must issue an individual insurance policy.
This type of insurance requires a special addendum to a contract – a bordereau, a description of all shipments indicating volumes and special terms of each. Insurance premiums can be accumulated during the duration of contract – for particular case or over a period of time.