Cargo insurance meaning – What is cargo insurance coverage?

Cargo insurance is applicable for shipments exceeding standard shipment dimensions and is normally transported on a pallet, directly into the vehicle, in containers or for bulk shipments. Meaning, cargo insurance will protect freight shipments travelling by air, sea, or road.

In general, the shipments are insured against the following:

Loss of the transported goods.
Damage to the goods while in transit.
Stolen goods while in transit.

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Cargo insurance

This means that the cargo insurance will cover shipments that endured any of the previously mentioned scenarios while in transit. The compensated value will depend on the value of the items and the insurance terms.

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Why is cargo insurance important?

After understanding what the meaning of the cargo insurance is, it is important to understand why it is essential to have this coverage.

There are certain risks when transporting goods by air, sea or road. Sometimes it can be human errors that can be calculated and sometimes even avoided, but there are some situations in that catastrophes cannot be avoided. Natural disasters, for example, are rather unpredictable and can cause significant damage to the environment, including the transported goods.

Regardless of if it is a human error or a natural disaster, you would want your shipment to be insured against any loss or damage.

The reason is simple, imagine this. You requested transport for goods whose monetary value is great. The shipment travels by air, sea or even road vehicle. While the goods are in transit, natural disaster affects your shipment. Now the crucial question is: was the shipment insured, or not? If you had your cargo insured, you would be reimbursed a particular value that depends on the type of insurance you have gotten.

What does cargo insurance cover?

Goods transported by land. The goods are insured against theft and other accidents during transit. This type of insurance also goes by the name of motor truck cargo insurance.
Shipments transported by air or water. A lot of handling is required for air and ocean freight shipments, and this is why the coverage is applicable if the damage occurs during loading or unloading, unfortunate weather conditions, and other accidents and dangers affecting this mode of transport.

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What is not covered by cargo insurance?

Depending on the carrier, but the list of goods that are not covered by the cargo insurance can be extensive. However, as some of the more common ones, we take out the following:

Hazardous cargo, valuable and expensive items, some electronic devices, or other special freight.
Some policies will specify which modes of transport are not covered by this specific cargo insurance.
Items that are not properly packaged.

Who is responsible for insuring the cargo?

Either the sender or the receiver will be responsible for purchasing cargo insurance, but it will depend on the specific conditions of each delivery. For international shipments and transactions, shippers usually rely on Incoterms to determine the shipping terms of the contract. Some Incoterms define that the sender (who is normally the seller of a transaction) is responsible for insuring the goods but others give this responsibility to the buyer. Read more about the different Incoterms and how cargo insurance works in each one.

When shipping internationally, it is important to define the shipping terms beforehand, including who pays for cargo insurance and what exactly is covered. Even if the parties are not obligated to purchase cargo insurance according to the Incoterm rules, you can still decide to get coverage for added protection of your cargo.

When do I need to insure my cargo shipment?

You should purchase cargo insurance when you want to take every measure to protect the shipments from any unwanted scenarios. Even though it is not necessary, it is always advisable to get it.

Can I insure my shipments if I send them through Eurosender?

Yes, every shipment booked with Eurosender is insured according to the CMR Convention if your shipment is travelling by road. Read all insurance options for different freight here. Additional insurance is also available through our insurance partner ERGO Versicherung AG. Please contact our experts to discuss the options of additional insurance available for your freight shipment.

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