Why should shippers have cargo insurance? Shippers are in the business of importing and exporting goods. What if something goes wrong? Cargo insurance is a safety net, protecting shippers from potential financial loss.
Cargo Theft Rates Are Rising
These days, you can’t be too careful, especially when cargo theft rates are rising. There can be fictitious pickups, as well as incidents of identity theft and/or piracy. What about containers “lost at sea?” Giant ships carrying huge stacks of shipping containers have the potential to lose containers, especially during storms full of high winds and tremendous waves. Catastrophic events do happen. Cargo insurance helps cover the costs when goods are ruined thanks to storms, shipwrecks, explosions, and even pirate attacks.
Potential Cargo Damage
Besides theft or total loss of cargo due to catastrophic events, don’t forget the potential for cargo damage. All sorts of problems can happen when goods are transported from Point A to Point B, including physical damages as well as temperature-related damages. Contamination and/or infestation can occur, too. Bad stowage and shore error can contribute to the problem. Wrong temperature settings, inadequate ventilation, and condensation don’t help matters. What about the quality of packaging and containers? There are many reasons for damages, which is why cargo insurance is so important.
Cargo Insurance May Save You Money in the Long Run
Sometimes shippers’ contracts obligate them to provide cargo insurance. This is usually to protect the buyer’s interest or their bank’s interest. It’s not worth the loss of sales or legal problems to not get cargo insurance when the contract specifically obligates one to do so. Litigation can get quite expensive! Meanwhile, carriers aren’t responsible, by law, for many common causes of loss that occur in transit. Shippers shouldn’t count on a carrier to cover losses or damage.