Cargo insurance is very useful for every e-commerce business.
Your shipments are often of great value to your business. Loss or damage can have significant financial consequences and threaten your business. Despite the carrier's efforts to ensure warehouse security, loss and damage can occur. To avoid the hassle, cargo insurance exists to protect your cargo from transportation-related risks.
Cargo insurance, which is sometimes referred to as marine insurance, typically covers the risk for physical loss or damage to goods while in transit, imports, and exports, and while inland, including any ancillary storage.
Storage out of the normal course of transportation can be added as an enhancement to a cargo insurance policy.
If you choose to ship your goods without any insurance protection, you will be responsible for the entire financial cost of property damage or loss to your shipment. You should know that recourse against the carrier is often limited.
What are the most common risks associated with shipping goods and when is it wise to purchase cargo insurance?
Freight transportation is generally safe and secure, but in the event of unforeseen problems, things can sometimes go wrong while the goods are still in transit.
If you entrust the freight forwarding your products to a professional carrier or freight forwarder, it would be wrong to assume that the carrier or freight forwarder is fully responsible for any damage or loss.
This is not the case. Using freight insurance is indeed mandatory if you want to protect your air-freight shipments.
Carriers and freight forwarders have only limited liability-coverage. If an unfortunate incident occurs, you may be faced with a very long list of insurance terms and conditions that are difficult for a novice to understand.
That's why it's helpful to know the general liability insurance principles, when does it make sense to purchase cargo insurance and what the most common risks associated with transporting goods are.
For freight transport, the Incoterms Rules define the rights and duties of the transport and delivery services between the buyer and the seller. Incoterms specify who pays for what based on the shipping services and shipping methods used. They also specify who is responsible for damage or loss of goods in transit.
Indeed, if the value of your shipment is greater than the amount for which your carrier or freight forwarder is responsible, it would be very prudent to inquire about cargo insurance or transportation insurance.
Cargo insurance services give you the assurance that if something goes wrong during transportation (lost, stolen or damaged merchandise), you will receive compensation for the real value of your goods.
The level of transport insurance and the insurance rates depends on several factors, including the value and nature of the goods, the destination, the mode of transportation selected etc.
Cargo insurance: risks and measures
The common risks associated with the transportation of goods are loss, theft or damage of the goods.
Lost or Stolen Goods: This includes demonstrable loss or theft of part or all of the shipment. In such cases, it is important to demonstrate that the loss or theft occurred during the transportation of the goods. In principle, a loss is indicated by a note on the transport documentation listing the contents and quantities of the shipment.
The courier signs the transport documents upon receipt of the shipment. If the consignee discovers a loss upon receipt and notes it on the shipping documentation, this will be proof that the loss occurred during transport.
Damaged goods: The shipper is responsible for ensuring that the shipment transported is properly packaged and secured. If a shipment is damaged or improperly packaged when received by the carrier, the carrier can record this fact on the shipping documentation. In the case of air or ocean freight, if the goods inside are visibly damaged upon receipt by the consignee, then the carrier is directly responsible. In the case of road transport, a note on the transport documentation is sufficient.
If damage to the shipment is not immediately apparent, in the case of air or ocean freight, the carrier must be notified of its liability within three working days and within seven working days for road transport. Goods are generally delivered to the consignee even if damaged, unless further transportation is unnecessary or impossible.
Delays: Late delivery of goods can sometimes result in financial losses, known as "consequential damages" or "special damages". Carriers and freight forwarders almost never accept responsibility for such property damage.
At most, they are required to reimburse transportation costs paid if errors or negligence can be shown. It is usually impossible to insure against consequential damages. This is because it is difficult to quantify the exact extent of such losses and to estimate the level of risk associated.
Why do you need to take out third party insurance such as Secursus?
If the value of your shipment exceeds the amount for which the carrier or freight forwarder is responsible for, if you are shipping a certain type of goods such as valuables or if you are shipping to unknown destinations without a well-organised infrastructure, you should seriously consider the additional, but relatively low, cost of a third party insurance coverage.
This third party insurance-company is double security and allows to cover what the general cargo insurance does not protect.
Our service at Secursus is the ultimate combination of fair pricing and quality of service: our online insurance covers items that are not usually covered by regular insurance, such as valuable items (jewellery, high-tech goods, works of art, etc.).
At Secursus we offer specialised third-party insurance depending on your needs, the number of packages to be insured, the type of parcels to be insured etc.
Your needs will define your Secursus shipping insurance business offer.
Our integration system is ideal for facilitating all time-consuming procedures when the volume of parcels to be insured is too significant.
Moreover, the Secursus integration system allows you to manage all your shipments at the same time, in fact, everything is centralised on your Secursus customer space.
Our integration allows you to save precious time, to centralise your parcel insurance and also gives you access to a reactive, professional and qualified customer care service in case of any problem.
Indeed, It is a real team of professionals who will assist you to define the offer most suitable to your needs and it will be this same team that will guide you and will lend you a hand in case of incidents, for example for the creation of claims etc.
Obviously, with the insurance of your packages and in order to guarantee the good functioning of the tools as well as the best possible customer experience, the implementation of the white label is conducted by us. Obviously, there is no charge for white labeling!
In addition, you can integrate Secursus into your website, application or CRM as well by using our ready-to-use libraries for PHP, NodeJS, Python or directly with our REST API.
Secursus is one of the most inclusive and cheap insurance providers on the market. We do not exclude valuables, jewelleries or art items for exemple. Secursus is also willing to offer the perfect service for your needs and wants: you will have the opportunity to discuss and arrange what you exactly want with our sales team. Moreover, we are willing to help you organise your integration and we will support and help you in case of any problems or claims.
Marine Cargo Insurance usually protects your goods against loss or damage whilst in transit including loading, unloading, and whilst goods are held in transit until the goods reach their final destination.
These limitations generally include losses caused by wear and tear, gradual deterioration, weathering, insects, mould, animals, and also the effects that sea life can cause. Certain plans also do not cover such damages as scratches, marks, blisters or manufacturer's defects.
Marine cargo insurance is a category of property insurance that insures goods in transit against loss or damages arising from perils related to marine or air navigation and the land and river routes involved.
The cargo insurance’s cost varies depending on the type of cargo, the origin and destination of the goods, and whether it is shipped in a closed or open container. In most cases, the cost of insurance is approximately around 0.5% of the total value of the cargo.
Cargo insurance may be required by any business that imports or exports goods or transports goods. Any business that uses marine transportation could benefit from the peace of mind that cargo insurance can provide.
There is a considerable difference between the liability of a carrier and a forwarder. A carrier is a company that physically transports goods from point A to point B. A freight forwarder is an intermediary who arranges transportation on behalf of his clients. As such, a freight forwarder is only partially liable in case of damage or loss.