All you need to know about Cargo Insurance and why you need it

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Although it may seem obvious, it is shocking to mention the least how many customers still do not take the right Cargo Insurance cover to insure their cargo comprehensively..

I don’t think anyone will intentionally not cover their cargo properly and can only assume that it is due to ignorance or lack of knowledge..

This post aims to educate everyone on what is Cargo Insurance and what steps are involved..

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Does ICC (A) clauses cover cargo claims for delays due to COVID-19..??

ICC (A) cargo claims COVID-19

As we have all seen, COVID-19 is causing severe imbalances in world trade which is affecting everyone, whether it is an exporter, importer, shipping line, shipowner, freight forwarder, trucker, or a spaza shop around the corner..

While ships are moving, ports are discharging and loading containers, nothing is as yet at a 100% capacity in most of the countries around the world..

Ships are facing port congestion resulting in blank sailings, containers are stuck in storage at ports, terminals, and depots around the world for later deliveries creating longer delays than anticipated and also causing yard space congestion..

In view of the delays experienced by the trade, we look at the question – Does ICC (A) cover cargo claims due to COVID-19 delays..??

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How to mitigate your losses and achieve cost saving

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The world is in the midst of the COVID-19 pandemic and the global economy has been greatly hit due to this. You may agree that during such time, it’s important more than ever to find ways for saving costs and take all measures possible to safeguard your business.

As a small or midsize business, there is no doubt that you are familiar with the stress of operating on tight margins, and you know how valuable even a small percentage of cost-savings can be to your bottom line.

However, what many small businesses don’t realize, is that their supply chain – particularly when it comes to imports – can be a significant source of cost savings!

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Instant shipment insurance anyone..??

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Cargo insurance covers/compensates a buyer or seller of goods against cargo damage or loss of cargo..

Despite it having been around for centuries, there is still a feeling that any form of insurance is a “grudge purchase”..

By its nature, insurance is an intangible benefit, one that can only be tested under adverse circumstances and there is nothing more adverse than cargo damage..

One of the common complaints about getting insurance is about the tons of paperwork that needs to be completed and the time it takes for all of it to be done..

Chubb, the world’s largest publicly traded property and casualty insurance company aims to take this pain away from the customers who are interested in having their goods covered..

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Updated information on Yantian Express General Average

Information article

Yesterday, I posted some questions relating to the consequences and process of General Average – once it is declared..

In a press release, ONE (Ocean Network Express) one of the alliance partners of Hapag Lloyd, have released further information relating to the Yantian Express which declared General Average on the 25th of January 2019..

The “Yantian Express” suffered a major fire resulting in both the vessel and a portion of the cargo suffering either fire or water damage..

ONE has released an update on the General Average security demand, latest salvage declaration details, a Salvage Guarantee Form and an overview of frequently asked questions (FAQ)..

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Consequences and process of General Average – once it is declared

Shipping and Freight Resource Press Release

Further to the recent maritime disasters and subsequent to the declaration of General Average on the Yantian Express, I received some questions surrounding the consequences and the process of the General Average – once it is declared..

  1. In a GA situation are ALL goods blocked, until the Average Adjusters have completed their work..??
    1. How long can the work of these Average Adjusters take on average?
    2. When will the goods be unblocked?
    3. Will all goods be unblocked?
  2. In this case, the final destination of the ship was Halifax but the ship has been taken to Freeport for assessment.. Do all goods have to stay on board till the full assessment is complete or do they release goods as assessed.. Say for example, containers in a section of the ship that has not been affected at all..??
  3. When do all the different parties have to pay their part of the indemnity fees and is paid by insurance or cargo interest..??
  4. These unexpected delays can of course create a certain “damage” to the owners of the goods; I understand the Insurance does not include any of the consequences of the General Average..??
  5. When will the beneficiaries of the insurance paid out (this would then refer to the owners that really lost material or got their own material damaged)  – do they have to wait until the Average Adjusters have done their work, made their conclusions, send in their reports etc… or can they claim immediately to the Insurance company and the Insurance company later on settles with the other parties?

We caught up with Jagannath Muthu, of NAU Pte Ltd to pose these questions and here is what he had to say..

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Why cargo insurance and insurers matter..

cargo insurance - shipping and freight resource

Cargo insurance is a type of insurance that covers/compensates a buyer or seller of goods against cargo damage or loss of cargo..

Despite insurance having been around for centuries, there is still a feeling that any form of insurance is a “grudge purchase”..

By its nature, insurance is an intangible benefit, one that can only be tested under adverse circumstances and there is nothing more adverse than cargo damage..

From a

  • Local (Street to Street, City to City, Town to Town) shipment;
  • to Provincial shipment within the same province/state;
  • to National shipment within the country;
  • to Regional trade within regional trade blocs like EU, BRICS;
  • to Global trade between countries

there are several modes and types of trade/shipments around the world..

Although it may seem obvious, it is shocking to see how many customers still do not take the right Cargo Insurance to cover their cargo comprehensively..

I don’t think this lack of proper insurance cover is intentional, but may be due to ignorance or lack of knowledge on the part of the client as far as Cargo Insurance goes..

So when I read an article from Tom O’Malley of TJO Cargo, I felt I had to share it with my readers for a better understanding of Why cargo insurance and insurers matter..

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Documentation involved in a sea freight shipment

Documentation in shipping

An article discussing the various types of documentation involved in a sea freight shipment prepared by the various parties involved..

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Compensation of damage claim in a CIF shipment

An interesting question from a reader about who will get the claim amount in a CIF shipment where the cargo is damaged in transit.. The seller or the buyer..??

Read comments from an expert..

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General Average – an introduction

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In the unpredictable industry of Shipping, it is always prudent for one to be comprehensively covered against all exigences.. This article discusses about one such exigency which is General Average..

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Incorrect cargo in container – who is responsible..??

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Incorrect cargo in container – who is responsible..?? This is the gist of the question below from Bukky.. Container arrived,sealed Cleared customs in Houston, TX. Pick up the same for … Read more here..

Do I need all original bills of lading for an insurance claim..??

Can I lodge an insurance claim with an original bill of lading or do I need all original bills of lading..??

The trigger for this topic is a question that a reader Sandreen asked as below..

One of our shipments caught fire on transit. To get the Insurance claim I have to submit the full set of original B/Ls, but I have lost 2 original B/Ls.

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If the carrier lost my cargo can I hold them liable..??

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If the carrier lost my cargo can I hold them liable..?? This is the question from a reader Erik.. His problem is as below.. HUGE issue with a carrier. The carrier … Read more here..

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