Cargo Insurance

For business owners, it is essential to protect cargo goods from various possible disasters. A marine cargo insurance policy is one of the best insurance covers that will help you safeguard your valuable cargo anywhere in the world. A cargo insurance policy will protect your cargo from any loss or damage caused during transit via road, sea, rail or air.

What is Cargo Insurance?

Cargo Insurance policies are designed to provide indemnity cover for goods/cargo carried through different modes of transport and transit.

A lot of money goes in packaging and transporting shipments. And any loss or damage would mean a huge loss. To cover up such losses, it is important to have cargo insurance in place.

Freight insurance can also be taken for goods during shipment. It helps in mitigating the risks related to the shipping process and helps you ship your goods in a more secured manner.

You can buy freight insurance directly from the shipper or an insurance provider.

Types of Cargo Insurance Policy

There are various types of cargo insurance in India. You can buy cargo insurance cover that suits most of your requirements such as import, export, transit within India, single voyage etc. Let’s have a look in detail-

Open Cover - An open cover cargo insurance policy is suitable for goods that are imported and exported. It is issued on a contractual basis for a period of 12 months. Under open cover cargo insurance, the insurance provider agrees to cover all the shipments that are within the scope of coverage. An open cargo insurance cover policy is based on an unstamped agreement.
Open Policy - This cargo insurance policy is issued to cover the transit of goods within India. Open policy is valid for a year. It covers all the goods in transit that are declared by the policyholder, which is subjected to the overall sum insured limit.It is issued on a stamped document. And stamp duty is taken in advance along with the premium. Usually, the premium is collected in advance for the complete estimated value during the policy term. In such cases, specific cargo insurance policies are not issued for each shipment.
Specific Voyage Policy - This type of cargo insurance cover is suitable for a single transit or voyage. The policy is generally issued before the transit starts. On completion of the voyage, the coverage will cease immediately.The specific voyage policy usually contains all the details of Vessel name/conveyance/ Bill of Lading/ Waybill and date along with policy terms, conditions and sum insured details similar to the other marine cargo insurance policies.
Annual Policy - This type of cargo insurance policy offers coverage to goods in transit by rail, road, and sea from stated depots or processing units that are hired or owned by the policyholder. It is required that the goods covered must be held in trust or belong to the insured.These policies cannot be issued to transport operators, freight forwarders, commission agents or to anyone in joint names. Annual policies cannot be transferred or assigned.

Why Do You Need Cargo Insurance?

To save your shipments and recover the money invested in such consignments, it is important to have the goods covered under a cargo insurance policy. It is helpful in the following circumstances:

Import and export shipments
For goods that are moved from one place to another by river transport
For goods being transported by sea, rail, air, road or post
Goods being transported by coastal vessels from one port to another
Cargo moved by country craft or small vessels over inland waters

Coverage Provided in Cargo Insurance

The insurer will compensate you for any damage that is caused to your shipment due to the specified natural and man-made disasters. Cargo insurance usually covers the loss or damage caused to the property due to the following reasons-

Collision
Explosion or Fire
Sinking or Stranding
Earthquake
Lightning
Jettison
Spillover or derailment
Washing overboard
Any damage during discharge of consignment at the port of distress
Salvage charges
Total loss overboard or while loading or unloading
SRCC and war conditions are specifically covered in some cargo insurance plans

Benefits of Purchasing Cargo Insurance

The major benefits of cargo insurance policies are listed below-

Cargo insurance plans are freely assignable
The existence of insurance interest needs to be established only at the time of loss
Most of the marine cargo insurance policies are based on an agreed value
Marine car insurance policies are usually transit policies and are not restricted to a precise period