What do you know about transport insurance?
27 March 2023
Received your goods damaged? It is not a given that the carrier will be liable for the damage, or that it will be compensated by default. Needless to say, this can have major consequences. Did you know that damage can be recovered from you even if you did not cause it directly? For example, if the ship sinks or a fire breaks out on board? Transport insurance takes away your worries.
To do or not to do?
A carrier is only liable for damage to the goods up to a certain amount. Sometimes a carrier is not even liable at all. For example, if your supplier did not pack the goods very neatly. Sometimes goods get lost or stolen during transport.
In short: each and every transport entails the risk of damages. If you haven’t arranged transport insurance, these expenses are rarely covered. In these situations, it is irrelevant which party caused the damage. These damages can quickly add up to an overwhelming financial impact for your business. Are you willing to take this risk? Transport insurance covers the risk you run when you have goods transported.
Costs incurred by events such as cargo theft, fire or water damage are often high, let alone a sunken ship or crashed aircraft. Skyrocketing costs can cause you unexpected problems. Consider, for example, the accident two years ago involving Mv. Ever Given. Some companies even went bankrupt as a result.
Transport insurance covers the risks of transport damage. You are then also insured for correct processing in the event damage so that your relationship with clients and suppliers aren’t subject to unnecessary pressure.
Have you incurred damages? It is always important to record irregularities and findings, such as water damage, on the consignment note (CMR) so that you aren’t left searching for proof after the fact.
Who arranges the transport insurance?
Transport insurance can be arranged in various ways, such as forming agreements with your supplier in the Incoterm formed. Do ensure that you explicitly document who is responsible for arranging the insurance. While insurance is frequently referenced in the Incoterms, insurance of goods isn’t always a given.
It is also possible to independently arrange transport insurance. This can be done for each individual shipment. If you are regularly shipping goods, however, ongoing insurance is most likely the better option and will save you time and expenses.
Lastly, you can always arrange transport insurance directly with us. As a freight forwarding agent, we are affiliated with the FENEX and can provide custom insurance for your transport upon request.
We are happy to advise you on which transport insurance policy is best suited to your situation. We work together with a specialised intermediary. Please feel free to contact us for more information and advice.
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