Cargo insurance is designed to protect against the risk of loss, theft or damage.
By concluding a contract, you can quickly compensate for losses that may occur during the transportation process, immediately resume the operation of the distribution network, protect your interests and the interests of your business partners. Today, any cargo can be insured, which is transported by any type of transport anywhere in the world.
Transport of goods takes place on a daily basis. The responsibility of the carrier in this case is a very important factor. When transporting goods, there is often a risk of unexpected financial loss as a result of damage to the goods, which can have a serious impact on their business.
The purpose of the insurance is to protect the property interests of the carrier in case of damage to cargo, life, health or property of third parties during transportation of goods
Any type of goods transported by a means of transport is subject to loss and damage due to several causes, which can be classified into the following groups:
- Natural events: Floods, storms, landslides, hail, lightning, etc., causing the collapse of roads, railroads or bridges
- Accidents with the vehicle in which the goods are transported: Collisions and overturning
- Accidents with lifting equipment: improper handling of cranes, falling of goods and their breakage
- Damage to goods due to improper preparation for transport and inadequate packaging
- Accidental pollution
- Acts of third parties: theft, robbery, malicious acts of third parties
- Damage caused by temperature fluctuations that significantly affect the goods due to their nature (rotting, fermentation)
- improper transport management by the carrier (non-delivery of goods)
Risk perception and risk assessment
Insurance companies have different criteria for assessing risk and calculating insurance premiums. They are affected by the type of goods, type of transport, route, packing method, choice of risks against which we want to insure the goods. Insurance of goods in domestic transport is cheaper than insurance of goods in international transport. Roughly speaking, the premium rates for insuring goods in domestic traffic range from 0.01% to 0.065% of the value of the goods, while the premium rates for insuring goods in international traffic range from 0.05% to 0.135% of the value of the goods.
Who is protected by the insurance of goods in transit?
It is very important to understand that transport insurance for goods and transport liability insurance (CMR) are two completely different types of insurances.
The transport insurance protects the owner of the goods against all contractually agreed risks and the CMR liability insurance protects the forwarder and not the owner of the goods. In case of damage or loss of the goods, the owner must prove the possible irresponsibility of the carrier to get the compensation for the damage.
Only the insurance of goods in transit starts from the moment when the insured object leaves the original warehouse and ends with the delivery of the goods to the warehouse of the customer.
Who is responsible for goods in transit?
According to the Convention on the Contract for the International Carriage of Goods by Road (CMR), intermediaries (forwarders) do not compensate for damage in the event of adverse events or they do so to a lesser extent.
When concluding a transaction, the seller and the buyer determine the point of transfer of ownership of the goods by adopting INCOTERMS clauses. On this basis, it is determined who bears the costs on the road where the adverse event occurred, whether it is the seller or the buyer.
“General Transport” is available to provide professional advice on insuring your goods in transit.