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Many shippers assume that their transported goods are covered by their freight forwarding company in case of accidents. They believe that as long their cargo is safely loaded into the aircraft or ship, they are already in safe hands. But for those who have learned their lesson the hard way, transporting your cargoes without insurance is a huge financial threat.

What Is Cargo Insurance

Legally, carriers should offer a minimum amount of insurance, which they call carrier liability. Therefore, you can somehow claim a certain percentage of your cargo’s worth from your freight forwarder in case of damage, loss or theft while your goods are in transit. Generally, the cargoes are insured while they are stored and while in transit until they reach the destination.

Unfortunately, not all realize the importance of insurance. This is, in fact, the most important part of freight forwarding and a critical element to have when you want to find an efficient supply carriage shipper that can ship your goods to and from Singapore. A reliable forwarding agent will include a cargo insurance to their package to give clients peace of mind while their cargo is in transit.

What Are the Limitations

As expected, insurances have limitation. For example, when your goods are shipped here in Singapore via truck, the carrier liability does not provide a protection against damages or losses caused by an independent motor carrier. That is why it helps a lot if your air freight, sea freight and local freight comes from a single freight forwarding company. It lets you get an insurance policy that can provide a broader coverage. However, commonly, there is not a single insurance policy you can buy and get 100 percent protection.

There are various types of insurance policies for cargo shipments, some are labeled as ‘broad form,’ ‘allrisks,’ and ‘legal liability.’ Regardless of the name, none of these policies provide total protection. These policies provide coverage in different ways, such as only these certain types of goods are covered, losses caused by some events are not included or a coverage only applied if the service is performed in a particular way.

In general, it is important for any shipper to record the value of their cargo in case of losses, damages or any disputes. It is also critical to seek legal help and work with an insurance company here in Singapore to fully understand your rights and level of protection.

Types of Cargo Insurance

Insurance policies for cargo shipping can be taken for local and international freight. However, it can be challenging to control and standardize any insurance policy without the cooperation of the countries due to the variations of the insurance, which can be categorized into the following classifications:

Marine Cargo Insurance

This covers the transportation of goods via sea freight. To dispatch goods delivery by ships, whether for import to or export from Singapore, they are covered with insurance in case of damage due to loading and unloading of cargo, piracy, weather contingencies and other issues. Most of these policies cover international freight, but many sea cargo insurances provide them with specific terms and agreements, which vary from provider to provider.

Land Cargo Insurance

This insurance will protect your cargo from the damages incurred during the land transportation of goods. The insurance’s coverage aspects include collision damages, theft and other related risks. This insurance is a domestic type and, therefore, operates within the boundaries of Singapore.

Why Do You Need It

Your freight forwarding services will have to ship your goods in land, sea and air. Have them insured to protect them against these favorable conditions:

Damages Caused By Many Different Circumstances

The logistics for transportation of goods provides plenty of opportunities for your cargo to get damaged. Some of the common reasons for damage are:

Poor packaging
Wrong choice of container
Poor distribution of cargo weight
Condensation
Overloading
Lack of carriage instruction
Wrong temperature
Stack weight exceeded
Contaminated floors

There are actually more things that can possibly go wrong and damage your goods. These are just a few to help you see why you need to get your cargo insured.

Limited Coverage of Carrier Liability

Your freight forwarder only covers so much. Although Freight Master is a trusted name in Singapore for logistics services, it is still imperative to get your grounds covered in case of unforeseen circumstances. Since carrier liability is very limited, you want something that will reimburse the most value of your goods in the event of damage, loss or theft.

Cargo Theft

Cargo theft, especially in the form of unauthorized pickup, is surprisingly common in this industry. A shipping company cannot monitor every single person who picks up a cargo, so you would want to do your part to help secure your goods and ensure they arrive to the recipient safely.

General Average

General Average is an accepted international regulation where in if certain types of accidents happen to the cargo vessel of your logistics company, all entities share in the loss equally. Even if your cargo is safe and undamaged, you will be required to pay a deposit or a bond for the release of your cargo. By getting an insurance, your insurance company will take care of this responsibility and ensures the safe release of your cargo during a General Average situation.

Should I Request for a Cargo Insurance

Now that we have tackled what cargo insurance is, what it covers and why you should get it, hopefully, you have realized the monetary security it can offer to you. If not, think of the possible risks you may encounter in the shipping of your cargo via air freight, sea freight and local freight. What could possibly happen to your business if the entire vessel of your shipping company faced a tragic accident that resulted to the loss of cargoes?

Accidents happen; so, it would be best to ask your logistics company if they offer additional coverage for their insurance. If not, look for an insurance company that can offer you the best possible coverage.