Shippers need to get cargo insurance simply because they are shippers. To be insured is inherent in them but unfortunately, not all understands the value of cargo insurance. The main purpose of cargo insurances is to spare shipper from huge financial loss. The ocean is one high risk area where natural and man-made disasters happen. It results to huge losses and the shippers may go empty handed.
There are so many reasons why shippers should get cargo insurance, listed below are only a few of them and are the most common reasons.
The number of cargo theft incidents reported over the year has tremendously increased. Not to mention piracy at seas which is a major risk shippers face.
Container Lost At Sea
Some containers just disappear like bubbles while in transit every year. In a survey conducted by back office offshoring solutions. There are approximately 733 shipping containers which vanished from 2011-2013. This statistic doubled in the last three years. On an average, around 350 containers got lost every year not counting catastrophic events like storms or sinking ships. This is one critical reason why shippers should invest in getting cargo insurance.
And there’s no way of predicting them. Storms, pirate attacks, explosions, shipwrecks and so much more, these events have caused much damages for shippers and the loss of shipping containers. If we count the total number of containers lost in a catastrophe, the number would be playing around 2500 – 3000 shipping containers, now that’s a lot. Imagine losing that much and have nothing to claim because you did not acquire cargo insurance.
Cargo damage happens all the time because there are so many opportunities of a cargo to get damaged. Bad storage, shore error, weak packaging, poor container condition, temperature set-up, container stacking, unclear carriage instructions, wrongly declared cargo and the list continues. CargoWise data entry services has a full list of the things that could go wrong and damage a cargo. The more that you need to have cargo insurance because once the cargo leaves the shore, the possibility of the cargo to get damaged is just overwhelming.
General Average – Expedites Cargo Release
There are times when you are required to post a bond or cash deposit for you to get your cargo following a general average even if there is no damage or loss to your goods. By having a cargo insurance, the insurance company expedites the release of your cargo and takes care of the bond or cash deposit. General average is a maritime principle when accidents occur, all parties share in the loss equally.
Limited Carrier Liability
Carriers are not responsible for common caused of loss that occurs while your cargo is in transit. Even if they are liable to the loss, their liability is very limited – either by contract stated in the bill of lading or by law. That’s why it is important to get a cargo insurance.
Control Over Insuring Terms
Relying on the buyer or seller’s insurance may be a good option but it is never enough. It is important to make sure that the terms, limits, and valuation of the insurance are both beneficial not just to the buyer or seller but also to the shipper. Nothing is better than feeling equally protected when it comes to ensuring your cargo.
By the name itself, cargo insurance gives shippers the peace of mind that in case something happens to their cargo, they can somehow not lose everything in a snap. At least with cargo insurance, they can be guaranteed that the cargo is protected in one way or another.