Everyone knows the sea is unpredictable, with anything from extreme weather to piracy, to accidents at sea can have an impact on cargo transportation. Equally, however, being able to ship internationally is vital for businesses looking to transport goods to a global market place. Therefore, to mitigate financial loss in the face of disaster it’s becoming increasingly important for businesses to safeguard their supply chains by investing in cargo insurance with experts like Freight Connects.
Cargo Insurance protects your shipments from loss, damage, or theft while your cargo is in transit. Cargo insurance policies can cover cargo carried by land, air, or sea and are usually proposed on a door-to-door basis. Coverage offered to the policyholder can vary, but events covered by policies often include natural disasters, vehicle accidents, cargo abandonment, customs rejection, acts of war, and piracy.
What is the Difference Between Ship Insurance and Cargo Insurance?
While both cargo and ship insurance are types of marine insurance, they cover different aspects of shipping operations.
Ship insurance is designed to protect the ship itself, and covers the vessel in instances of physical damage, loss, or destruction caused by collisions, sinking, storms, or fires. Ship insurance is generally purchased by the ship owner, and ensures they can cover the cost of repairing or replacing the vessel if required.
Cargo insurance on the other hand protects the goods being transported by sea, and covers against damage, loss, or theft during transit. As previously mentioned, it is typically purchased by the cargo owner to provide financial compensation in instances where these issues arise.
What is the Difference Between Cargo Insurance and Freight Insurance?
Ultimately ‘cargo insurance’ and ‘freight insurance’ mean the same thing. ‘Freight insurance’ is a term used in the US and Canada. Freight insurance protects the freight forwarder or carrier who has a legal responsibility for the goods. In the event of a claim, the value is often calculated based on weight. Cargo insurance is designed to protect the sender of the goods – the manufacturers, wholesalers, and retailers.
