In this post, we would like to take a deeper look at Cargo Insurance. Specifically, what is cargo insurance and if you as an importer/exporter or freight forwarder really need it for your shipments. We also highly recommend that you read our post entitled How much Cargo Insurance cost? first to continue with this topic.
What is Cargo Insurance or Freight Insurance?
In a few words, Cargo insurance is a type of insurance that compensates a buyer or seller of goods against cargo damage or loss of cargo.
Despite the industry has been talking about it for years, there is still a feeling that insurance is unnecessary. Because it is an intangible benefit, one that can only be tested under adverse circumstances.
As we mention in another post legally, all carriers must carry a minimum amount of insurance, known as carrier liability. But as we explain it provides very limited coverage and importers/exporters can request cargo insurance to protect their goods from loss, damage, or theft while in transit.