International Shipping Insurance
Why is it important to have your cargo insured during the international transit? Mostly because of the limited liability of the shipping vendors. Did you know that the vessel operators are only responsible by law for $500 for the lost cargo. For example, let’s say you shipped a brand new BMW worth $45,000 from USA to Europe via a container service. During the transit the vessel hit some rough seas and your container got washed away. How much do you think you’re going to get from the vessel operator? Full value of the car because it’s their fault, right? Guess again… only $500. This is all the international maritime laws require.
- Other parties involved (warehouses, freight forwarders, trucking companies, ports, etc) all carry limited liability and will never automatically cover the full value of the cargo they handle. This is why international shipping insurance is a very big business because it provides the required coverage in case something happens to your shipments during the transit.
- There are 2 basic types of international shipping insurance you can get: ALL RISK and TOTAL LOSS. All Risk will cover any loss or damage occurred to your cargo during the ocean transport. It does have a deductible and possibly some exclusions but this is the most encompassing coverage you can get. Total Loss only covers the complete loss of cargo – it will not cover for minor damages. In other words your shipment must be completely lost, stolen, ruined, etc for the this coverage to apply.