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What Makes Cargo Insurance A Necessity


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Understanding the Importance of Cargo Insurance

Why is Cargo Insurance Essential for Shipped Products?

If something occurs to your products while they are in transit, cargo insurance will pay for it.

What is the Significance of Cargo Insurance Considering Carrier Liability?

Because carriers make a concerted effort to reduce their liability, cargo insurance is essential.

  • **Carrier denial rates for freight claims are 50%.**
  • It is quite unlikely that the carrier will be held responsible for much, if any, of the value of the products if something were to happen to your items while they are in transit.

Understanding the Risks during Transit

The voyage is dangerous and lengthy, involving multiple handling points for your cargo.

  • On its way to you, your cargo will be handled by several people as it is loaded and unloaded from trucks and containers, travels through ports and inspection points, and passes through warehouse after warehouse.
  • While each stage is crucial for your items to eventually reach you, the likelihood of damage grows the more checkpoints your goods pass through.

Responsibilities and Challenges with Carrier Liability

Carriers are not guilty until they are shown to be. Carriers will take all reasonable steps to prevent liability or to minimize it if damage or loss does occur.

  • It is your responsibility to demonstrate that the carrier was at fault.
  • You must unambiguously demonstrate each of the following:
    • While the shipment was under the carrier's care, custody, and control, a loss occurred.
    • The carrier handled your shipment carelessly.
    • Carriers set strict liability limits.
    • You could not receive the full worth of your products even if you can show that the transporter was at fault.
    • Carriers impose severe liability restrictions.

Common Risks and Damage Scenarios

Things can go wrong, and frequently do. The majority of cargo damage happens on the way to and from ports. However, there is also:

  • Ships may sink
  • Theft
  • Storms
  • Water stains
  • Moving crushed or shattered cartons

Exclusions from Carrier Coverage

No carrier is bound to cover damages that are not within their control, such as:

  • God's actions
  • Latent flaws in the machinery or hull of the ship
  • Vessel's lack of seaworthiness
  • Criminal conduct or negligence on the part of the crew
  • Risks, dangers, and maritime mishaps
  • Fire
  • Theft

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