What is Freight Insurance and What does it Include?
Freight insurance shields you against the potential losses caused to the shipment during transit and carriers for potential loss for a customer too. There are many types of insurance involved like shipping insurance, cargo insurance, freight insurance, transit insurance, moving insurance, and transport insurance. These insurance terms cover goods or merchandize against loss or damage in transit while moving from one place to another. There are two kinds of cargo insurance provided and suggested by Clearit customs brokerage, contingent cargo and primary cargo insurance. The former is mandatory for all freight forwarders and has a legal minimum requirement. It is the basis for coverage. The primary cargo insurance makes sure that you are insured for the full actual value and this insurance can be issued per shipment or through an annual policy that can cover multiple shipments every year.
Most carriers bear freight insurance, but when you are an importer, you need to look into separate cargo insurance like marine freight insurance as carrier liability. If you need full value coverage, then go for replacement value cargo insurance. Carriers must always be kept apprised with the value of goods they are transporting. If the value is not covered by the carrier liability coverage, then this should be informed to the client and ascertain if extra insurance coverage should be bought.
Inland cargo insurance
This insurance covers domestic shipments through land and air. Ocean cargo insurance offers coverage for shipments moving via ocean whether on boat or container ship alike. Cargo insurance coverage is also called warehouse to warehouse. This coverage takes place when transit begins and ends when cargo is delivered to the final destination.
The parties who are responsible for getting insurance can share the responsibilities accordingly. Ensure that the contract confirms the party held responsible for the insurance policy in the first place. The best way to do so by using a worldwide accepted term called Incoterms®. It clarifies the extent to which a party can take the responsibility for a particular risk while the goods are in transit. They determine the responsibilities of the buyer and seller and are deemed the international standard by the customs authorities and courts in the trading nations. Incoterms® eliminates all misunderstandings and legal issues and also determines the loading and unloading duties of buyers and sellers as well.
For more insight on freight insurance and other aspects of international trade, visit the website today!