CARGO INSURANCE

Cargo Insurance provides coverage against all risks of physical loss or damage to freight during the shipment from any external cause during shipping, whether by land, sea or air.



Also, known as Freight Insurance, it covers transits carried out in water, air, road, rail, registered post parcel, and courier.



Cargo insurance is important in international trade. Different types of cargo insurance policies available for transporting goods by land, sea, or air.



Businesses need cargo insurance to reduce risk in importing and exporting. Cargo insurance is covered under risk policy or floating policies.



The cargo may be of any description, for example, wares, merchandise, property, goods and so on. Duration of the risk of attaching from the time the goods leave the warehouse or another place of storage at the placement of the policy for the commencement of transit.



Freight is to be payable for the carriage of cargoes or if the vessel, is chartered, the money to be paid for the use of the vessel. The carriage is unable to earn freight if the goods or properties (cargoes) are not safely transported.



Pre-paid freight payable in advance is at the risks of the cargo owner who includes it in the value of the goods insured under a cargo policy.



But freight payable only, on the delivery of the goods at the destination, is at the risk of the ship-owner who has the insurable interest in it and therefore can insure it.



The disbursement warranty of the ITC (Hulls) allows the shipowner to effect in ‘Conjugation with 12 months insurance on the ship’s hulls and machinery etc.



Time insurance on freight and charters freight and anticipated freight. When the ship is lost, it also results in loss of her profit earring capacity and the termination of freight contracts already entered into.



A certain amount of freight is insured by a shipowner for 12 months under the Institute Time Clauses (freight).



Additional policies are insured on a voyage basis. The freight at risk on any voyage exceeds the amount of insured for time. The Institute Voyage Clauses (freight) is then used.



Time charter hire is payable to the shipowner for the use of his ship for carriage of goods for a specific period.



If any events occur, such as the breakdown of machinery damage to the vessel, etc. which prevents’ the operation of the vessel for more than 24 consecutive hours, of the payment hire, shall cease until the ship become operational.



This freight is at the risk of the ship-owner.



Importance of Cargo Insurance



The risk then continues during the ordinary course of transit to terminate on delivery.



Cargo insurance has coverage of loss or damage caused by war, civil war, revolution, rebellion, insurrection or civil strife or any hostile act, capture, seizure, arrest, restraint detainment, general average and salvage charges, strikes, riots, etc.



Trade coverage covers the insurance needs of the various type of cargoes of general nature.



A number of commodities and foodstuff provide for particular hazards. Institute of London Underwriters (ILU) have adopted uniform trade practices.



Which are followed by other insurers for insurance of cocoa, coffee, cotton, fats oil knots, hides, skins, leather, metal, oilseeds, sugar, tea and so is assured under a standard policy.



There is separate insurance of coal, Jute, Rubber, tanker, bulk oil, frozen products.



Advantages of Cargo Insurance – Why You Need Cargo Insurance



Cargo Insurance or Freight Insurance benefits local and international trade.

90% of international cargo transportation is carried out by sea. Again the overwhelming amount of sea transportation is handled via containers by means of state of art container vessels.



If you own an import-export business then you must know how important cargo insurance is for you to deliver the products in its proper condition.



In export-import business every time, you need to invest a big chunk of money in order to ship the product but it is quite often seen that business owner ignores the importance of cargo insurance due to which sometimes they have to suffer from the loss.



Following aspects are covered under the benefits of this insurance:-



•Damages due to inappropriate packing.





•Infestation.