(Click here for an Open Cargo Policy Application)
The Need For Cargo Insurance
Although you may not see news of a ship sinking on page one, on average 350 ships sink per year. Many more have minor accidents and encounter partial damage from heavy weather.
Freight carriers do not automatically provide insurance during transit. Ocean Carriers limit their liability to $500 per package, while International Air Carriers limit of liability is $9.07 per pound and domestic carriers are normally $0.50 per pound. This limited liability should not be confused with insurance as it does not cover Acts of God, it only covers those risks which are directly associated with the carriers liability.
Cargo insurance enables your company to control the transit risks of merchandise being bought or sold, until it reaches final destination. Should you export on an FOB basis or import on a CIF basis, you have no guarantee that the type and scope of insurance provided by the buyer/seller fully protects your interests in the goods. Open Policies can be endorsed to include Domestic Coverage, warehousing, storage, Contingency, Difference in Conditions, Exhibition and a variety of other coverage.
Standard Coverage is “All Risk, Warehouse to Warehouse”, although lesser coverage’s are available (for detailed description of coverage Perils Table). . The “All Risk” coverage provides protection for loss or damage from any external cause. Inherent Vice and delay are not covered. Goods are covered from point of origination to the final destination, including all intermediate transit whether by rail, truck or other forms of transportation and covers both inbound and outbound shipments. Goods may also be protected while in temporary storage for the purposes of consolidation or deconsolidation.
Coverage is also provided for “General Average” declarations by the steamship company. In the event there is a collision, grounding, sinking, etc. of the ship, a General Average will be declared. This means that all parties with cargo on board a vessel must post a bond which guarantees any financial obligation in order to get their merchandise released. Not only will the insurance company pay for the cost of the bond, any damages assessed to your client will also be covered.
Policies can be endorsed to enclose the following additional coverages:
Warehouse Property – Although the storage of inventory is often times covered under the Commercial General Liability and Property package, it is worth a look at the cost of covering inventory under a warehouse endorsement to the annual open cargo policy.
(Click here for warehouse property application)
Domestic Transit Insurance – covers goods shipping within the U.S. and Canada
Unpaid Vendor Insurance – Sellers benefit from this insurance when selling without insurance included. This covers the interest of the seller as an Unpaid Vendor from the time shipments become at the risk of the customer under the terms of sale until payment of draft but in no event beyond the time when this Assurer's risk would normally cease under the terms of this policy.
Contingency Insurance – Buyer’s benefit from this insurance when purchasing on under C.I.F. terms. This policy covers the difference in conditions between such other insurance and the terms and conditions of insurance provided in this policy for the merchandise involved.
Contingency Supplier’s Insurance – Buyers may also benefit from this coverage as it guarantees collection of any claim recoverable under the terms and conditions of the seller's insurance when unpaid.
Windward Making It Work for You
Transportation insurance can be purchased under an Open “annual” Policy or on a single trip transit. Each method offers a variety of options with regard to payment terms and the minimization of paper work. The risks covered is the same for either method.
Annual Open Cargo Policy
An open cargo policy allows you a great deal of flexibility in reporting your annual shipments. Often times, customers report using spreadsheets from programs already existing in their electronic systems. Others simply make an annual statement on company Letter Head with a declaration of the total annual amount insured.
Shippers requiring individual insurance certificates, can access an “On-Line” program to issue Original documents from the desktop.
Policy rates are based on the commodity, method of transportation, country of origin, destination and the annual volume insured.
(Click here for an Open Cargo Policy Application)
Single Trip Transit
A Single Trip Transit covers the cargo under the same conditions of the Open Policy, except that it is requested on a single shipment basis. This method is designed for those companies that do not require insurance on an ongoing basis or companies that are new to the trade industry.
All you need do is complete a Trip Transit Application, submit and a rate will be quoted. Once you give the go ahead, a certificate will electronically be issued and forwarded to you via e-mail for printing and endorsement of the original document. This normally occurs within 30 minutes of the request.
Insurance rates on based on type of commodity, the country of origin, method of shipment and the country of destination.
(Click here for a Single Trip Transit Application) |
