Safety and insurance of the shipment
- Shipping insurance is basically a service which maybe reimbursed the shipper whose parcel are lost, stolen or damaged in transit. Postal services, courier companies or shipping insurance companies sold in most parts like USA or Canada the shipping insurance.
- For those who regularly deal with the shipping companies are always concerned for the safety and protection of the components.
- It is always a priority in customer’s mind to deal with the company who offers safety and insurance of the shipment. Insurance is expensive but in our society which is risk adverse, it is absolutely necessary to get the product insured. One can insure almost anything from general commodity to high value products. It depends upon the value of the product as well as the type of parcel it is. The normal carrier’s liability according to the type that they will be responsible for the damages and pay certain amount. But beyond that limit shipper have to bear the loss.
- The customer goes for insurance to be more secure and safe. If a product cost 3 million dollar and he is paying 10 thousand dollars as insurance. He will move ahead as it will be the shipping company’s responsibility to handle the damages.
- While shipping any product is to declare the value of the cargo on the bill of lading, if you don’t then there is no responsibility of carrier to bear the damages.
MARINE INSURANCE ACT 1906
- This says that all the questions must be answered correctly and honestly. You should disclose all the material facts otherwise the insurer will breach the warranty.
- It applies to any of the product from normal or high value, or delicate products. It is very important to talk with the carrier about insurance and all the policies they will offer you before making final booking. Almost all the carriers have some kind of cargo insurance apart from normal carrier liability. IMT carries one of the highest cargo insurance policies available to ground carriers in the market.
- The insurance is provided to the customer if the company is unwilling or unable to take on the risk and is normally costing above the normal transportation. For this reason the insurance companies offer attractive insurance policies to encourage demand. It not only affects the shipping rate but encourage insurance. The insurance companies have to adjust their premiums more modestly in order to stay in the business. Both the ocean freight and air cargo are important from the insurance prospectus.
- In shipping insurance there is a vast category of insured goods and non-insured commodities. It depends on the insurance company and they clearly mention in their policy, terms and conditions. They also disclose whether limited liability coverage is offered or the client has to pay the additional cost.
- Marine insurance covers the loss or damage of ships, cargo, terminals or any transport by which product is transferred between the points of origin to final destination. It also includes on shore and off shore exposed property like containers, terminals, ports, oil platforms or pipeline, etc. When goods are transported by mail or land freight, shipping insurance is used.
Marine insurance policies
The marine policy only covers 3 quarter of the insurance liabilities. There are various marine insurance policies:-
1. Open cargo or shipper’s interest insurance:- This policy is purchased by a carrier, freight broker or shipper as a coverage for the shippers goods. In the event of loss or damage the company will pay for the true value of the shipment rather than only the legal amount that the carried is liable for.
2. Yacht insurance:- Smaller vessels like yachts and fishing vessels are typically covered under this insurance coverage.
3. War risk:- If during war, the attack area which is at risk of piracy and riot then it would be covered by war risk insurance. It does not cover the risk of vessel sailing into a war zone.
4. Increased value:- It covers and protects the ship owner against any difference between the insured value of the vessels and the market value of the vessels.
5. Overdue insurance:- This was an early form and used to buy by an insurer when a ship is arrived late at the destination port and there is a risk of lost, damaged or stolen product
- Cargo insurance:- it is classified as category A,B and C. A is the insurance which is widely used in product insurance and category C is most restricted. The federation of commodity association has set some clauses used for the insurance of shipment of cocoa, coffee, cotton, meat, oils, metal, sugar, tea, etc.
- The shipping insurance companies provide protection for domestic as well as international packages. Insurer can file a claim any time for lost or damaged or stolen parcel. They must look around and check various insurance companies for comparison as prices varies and one must opt for the best deal.