When you want to import or export goods, one of the main things you need to attend to, is insurance. The obvious insurance that comes to mind will be to insure your cargo. But it’s not as simple as determining the value of your cargo and then finding an insurer willing to cover it for its replacement value. No, cargo insurance can be divided into various sub-categories, of which we discuss only a few.

Cargo Insurance

Never, ever let cargo leave your premises without proper insurance. Nobody can even start to tell you about all the possibilities of what could go wrong with your cargo.

So many I talk to say that insuring cargo is very expensive, so they rather run the risk of letting their cargo hit the road (pardon the pun!) without being covered by insurance. Especially private importers and exporters are often guilty of this. But considering that the cost of insurance is about 1% of the total insured value – this may vary depending on the goods and mode of transport – you really can’t afford not to insure your freight.

There are many different types of insurance you can get for your cargo. From insuring breakables in the event of a road accident to insuring that load of beautiful cutlery in case it ends up at the bottom of the ocean, anything is possible. Obviously, there is a vast difference in cost of the different types of insurance.

General Average Insurance

One type of insurance importers/exporters have to consider, is general average insurance. When a ship leaves port, the captain and his crew have to keep the safety of passengers, crew and of course cargo in mind. But when they get in trouble in stormy waters, they sometimes have to jettison some of the cargo to save not only lives, but often also the rest of the cargo on board.

Now you might think that this isn’t your problem. As long as the cargo that was jettisoned wasn’t yours, you are safe; but that is not the case. According to maritime law, even though your part of the cargo is safe, you can’t take possession of it until you have paid for your part of the loss.

There is a good reason for this law. Can you imagine a ship in imminent danger, with the crew standing around quarreling about which cargo they can throw overboard and what should be kept? Because everybody shares equally in the loss of cargo in this case, everyone’s merchandise is treated equal and no distinction is made when deciding what to jettison.

Export credit risk insurance

According to ICISA, export credit risk insurance can be described as follows:

Trade credit insurance covers payment risks resulting from trade with buyers. If the seller or policyholder decides to only insure his exports, i.e. his trade with buyers situated in other countries than his own, the cover is referred to as Export Credit Insurance.

If you are in the import/export business, you will have to get export credit risk insurance at some point.

For any form of import/export insurance, you can contact us to help you get the best insurance for your needs so you can have peace of mind.

Ways You Can Avoid Import/Export Insurance Claims

Although you can’t possibly prevent all loss, there is a lot you can do to mitigate the risk and having to claim from insurance. Most of this has to do with the way your merchandise is packed. We can help with advice on how you can prevent loss of your specific cargo. Here are a few general guidelines:

1. Expect that someone might want to ‘sample’ what you are sending. Let’s call it what it is: theft. This can be a big problem if your cargo isn’t securely packed in such a way that makes it impossible or at least difficult for thieves to get hold of. Another simple but effective measure against theft is to not use trademarks or content descriptions on the outside of your container. If they don’t know what’s in a container, they will probably move on to a container that is marked and that has goods they know they can use.
2. Keep loading docks and their procedures in mind. You don’t always know what the docks in other countries look like or how they will deal with your precious cargo. You also don’t know if they will store your goods indoors or out in the wind and rain. Make sure your cargo is packed in such a way that it is protected against the elements and/or rough handling. Use straps, bubblewrap, waterproofing, etc. to protect your merchandise.
3. Expect nature to be unkind. Over the last few years we have heard so much about global warming. One of the consequences is worse storms at sea. So when packing your cargo you need to keep salt sea air, sea spray, rain, heat, humidity and stormy weather in mind. When sea water gets into containers, the result is mold, mildew, rust, etc. So make sure you keep this in mind and take preventative measures like waterproofing, rustproofing, etc. in consideration.

If you need further information regarding the insurance of your precious cargo, contact us.