Although transportation carriers often have cargo insurance, don’t expect it to cover the full financial value of your shipment. Depending on the event causing the damage, the coverage may not apply at all. An Act of God, strike, riot or signed delivery receipt attesting that the delivery was intact may negate the coverage. Cargo insurance programs that cover shipments while in transit can ensure your company doesn’t lose money when physical loss or damage occurs.
How Much Insurance Is Needed?
Many insurance professionals recommend insuring the shipment for the full CIF value to cover replacing the cargo plus the shipping costs. The formula to calculate the CIF value includes:
- Cost of Goods
- Combine the prior three costs and multiply by 10%
What Is Covered by Cargo Insurance?
Cargo insurance programs differ depending on the insurer and needs of the freight owner. Policies may cover the following types events and assets or have the following features:
- Coverage extends from the originating warehouse to the receiving warehouse
- Storage coverage extensions
- Towing, storage fee and debris removal coverage
- Long haul or local radius operations
- Various deductible and loss limits
- Non-owned trailer or container coverage
- Refrigeration breakdown coverage
- Pollutant and debris cleanup
Whether you are shipping valuable merchandise across town, state or country, cargo insurance programs protect your company’s assets when they’re on the move. With many coverage options available, be sure to explore the possibilities to ensure your policy meets your needs.