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Cargo Insurance
covers goods in transit... while they move...
If you have not specifically asked for cargo insurance
then you risk losing your goods and your money.
All "cargo transit" insurance is called "marine"
insurance, a term begun and carried over from a time when most goods moved by
water. |
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Forwarders
- a Link to a version of this you
can print then copy onto your stationary to explain to Shippers why
they should buy cargo insurance is here, and at the bottom of the
page.
< CLICK HERE > |
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For a better understanding of
marine insurance, see our "Logistics Guide to Insurance" at:
http://www.allcovered.net/AC-OM-Log_Guide.html |
| Why
should I buy Cargo Insurance? |
The simple answer is: "You
should buy Cargo Insurance for peace of mind."
Cargo Insurance repays you for actual losses or the
"Stated/Declared Value" of the goods, whichever is less, under the
Terms & Conditions of the insurance you buy... just be sure you
have insured the goods for their full value.
If you under-insure any claims settlement will be
proportionate to the percentage of under-insuring. If you insure goods
for half their real value, you will be reimbursed for half a claim. |
| Why
should I pay extra for Cargo Insurance? |
The cost of cargo insurance
is only a small fraction of the total cost of packing, shipping and
handling your goods.
Without insurance, you will receive almost nothing in
the event of damage or loss. |
| Without
Cargo Insurance you will only be paid very little for damage |
If you move
goods by truck or ocean, without cargo insurance you will be paid
only $0.50 per pound for any damaged goods, or paid a total of
$500.00 for all goods in an ocean shipment.
By law, that is all truckers, railroads or ocean
carriers are required to pay you.
Air shipments will be paid at either $20.00 per
kilogram for losses or under a new scheme known as the Montreal
Protocol, as much as $23.00 per kilo. |
| Even if your goods
arrive safely, you could still be forced to pay for someone else's
loss. "GENERAL
AVERAGE" |
This is a concept called
"General Average," dating back well over 3,000 years.
Under General
Average, those whose cargo survives a voyage are charged to repay the
loss of another shipper whose cargo may have been jettisoned or lost
for the protection of the vessel and the load remaining.
Any shipper whose cargo arrives intact when others' was lost may
face a General Average charge.
Insuring cargo under the minimum,
"Institute Cargo Clauses C" or better will cover General Average claims.
EXAMPLE: You could ship $5000 worth of waste paper yet be
faced with a $150,000 General Average claim for cargo lost by others.
ICC Clauses C minimum insurance covers this.
If there is a General
Average claim, you would be forced to post a Bond or Letter of Credit
or Cash for the full $150,000 in the above example for the several
years it takes the General Average claim to work its way through the
courts unless you had cargo insurance. |
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What does Cargo Insurance cover? |
The simple and frustrating
answer is: "It Depends."
There is an old adage in motor racing, "Money buys
speed... how fast do you want to go?"
For Insurance, "Money buys protection. How safe do you
want/need to be?"
Cargo Insurance pays based on the protection you buy.
Cargo insurance is a contract. It covers the cargo
under the insurance contract wordings made up of Standard Conditions,
any applicable Special Conditions, and any applicable ICC Cargo Clause
wordings.
In very general terms, ICC Clauses A covers
everything EXCEPT what it specifically excludes, such as War &
Strikes.
If you purchase ICC A, War & Strikes coverage in
combination you have what is commonly referred to as "Full Cover,"
or "All Risks."
The far more limited ICC Clauses C covers NOTHING
EXCEPT what it specifically says it covers.
Limited ICC Clauses C DOES cover General Average
claims or losses if the truck/railcar/aircraft or ship turn over, run
aground or
crash.
Limited ICC Clauses C DOES NOT pay for partial
losses, damage, or theft unless that loss was caused by the "named
perils." If the truck/plane/ship arrives fine, but your goods were damaged or
stolen, you receive no insurance payment.
Read and understand the wordings of the insurance you
purchase.
To help you understand what the ICC Cargo Clauses do
and do not cover, we have an easy-to-read chart at:
http://www.allcovered.net/AC-OM-ICC_Clauses_Compare.html
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What are ICC Clauses? |
Institute Cargo Clauses are
international treaties.
ICC Clauses wordings are accepted in more than 140
countries worldwide. Through long negotiations the participating
countries have all agreed, in a legal sense, exactly what the wordings
mean... that is... what is and is not covered.
Because international shipments may move across many
borders, through many legal jurisdictions, using ICC Clauses lessens
the chance of any misunderstandings or delays in payment in the event
of a claim. |
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Forwarders - a Link to a version of this you can print
then copy onto your stationary to explain to Shippers why they should buy cargo
insurance is here, and at the bottom of the page.
< CLICK HERE > |
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