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Risk in Context

Why Offering Cargo Insurance Is a Must

Posted by Michael Wilson July 26, 2016

In July of last year, a truck leaked 220 gallons of maple syrup along a New Hampshire highway.  This past June, a big rig truck filled with two trailers of onions overturned on a California freeway.  On July 4th, a tractor trailer rollover spilled 47,400 pounds of milk in Wisconsin.

In each case, the cargo owner had a vested interest in the shipment arriving safely. Loss or damage caused in transit has the potential to impose great financial loss on a cargo owner. The best means of protecting their financial interest is to offer and provide full direct damage cargo insurance to your customers.

All risks cargo insurance is one of the broadest forms of coverage available for the full exposure and the full value of the cargo. The coverage provides protection from “warehouse to warehouse,” irrespective of the number of subcontractors involved and includes “Acts of God,” terrorism, and strikes, riots, and civil commotions risks. Claims are usually settled quickly based on the insured value of the shipment, including freight charges and a 10% mark-up, if declared. Most importantly, the customer does not need to prove fault or negligence on the part of the at fault party.

Unless your limitations of liability are clearly understood, the client may plead innocence and expect full payment from you (the carrier) should a loss or damage occur. Address the issue of insurance prior to shipping the goods and convince the customer that cargo insurance is their best protection option.

Related to:  Marine , Transportation

Michael Wilson

Michael Wilson is a Vice President in Marsh Canada Limited’s Marine, Logistics and Transportation Group. Michael has created and developed shipper’s interest cargo solutions and programs in response to the complex needs of the logistics and transportation industry, as well as the needs of clients in other industries who have global and domestic transit exposures.