Cargo, shipping insurance mistakes -- most people don't really understand that they aren't really protected when shipping their products. Read this, you might be surprised to learn that you had some serious risk hanging out there on your recent shipments.

Cargo & Freight Insurance

Protect Your Shipment — Cargo Insurance — Freight Insurance Mistakes

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There is quite often a mistaken understanding about cargo insurance, freight insurance.

The biggest misunderstanding is about who is responsible for what? And how much are they responsible for?

As the shipper, the person who actually owns the products and wants to get them transferred safely somewhere on time, when we hand our products over to the carrier, the company who is responsible for getting it where we want it to be in the time we want it to get there, we often assume that suddenly he’s responsible for either getting it there in one piece or paying u for the value of the product that is lost.

And even then, one misunderstanding might be about what is that value. Let’s say that you have a shipment of your products that cost you $1,000 per item for you to produce, that’s price 1. But the company you are delivering it to has paid you $1,500. And then, let’s add in yet another value. If it isn’t delivered, or if it doesn’t get there on time, the loss to the company you are responsible to deliver to is over $10,000 per item because they can’t include it in some product they use it in.

• Who is responsible?
• What is the cost?
• Who’s Responsible for What?

Carriers are not liable for loss or damage caused by mother nature … you are

Natural disasters aren’t predictable and most carriers make sure that they aren’t responsible in their contracts. A shipment at sea that gets tossed around and gets damaged, or wet is your responsibility. Maybe it should have been packed better. In any case, you have to protect yourself by carrying your own insurance.

Your Buyer’s or Supplier’s Insurance Is Not Enough

I don’t know about you, but I always tell my clients that you should never be at the mercy of anyone or anything. It’s plain risky to rely on someone else’s insurance. By buying your own insurance you are in control of what kind of coverage, how much, and the cost.

Stolen or Mishandled Cargo is Your Responsibility

Carriers typically limit how much they are liable for. If your cargo is stolen or damaged in transit, guess what, you might not even be able to recover your replacement costs.

How Much?

As I said in several of the statements above, frequently the carrier limits not only what he’s responsible for but, according to tarrifs and the bill of lading he may limit how much he’s responsible for. You may not even be able to recover even the cost of replacement.

Therefore, always be in control by having your own insurance on the shipment. Work out with your own insurance company what will be covered and how much. Be in control rather than at the mercy of anyone.

By planning what your coverage should be rather than living with the carrier’s insurance you can design the outcomes and limit your risks

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The review "Protect Your Shipment — Cargo Insurance — Freight Insurance Mistakes" was last updated on 28/8/09.