Why YOU Should Have Cargo Insurance
 

     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.

 

For a better understanding of marine insurance, see our "Logistics Guide to Insurance" at: http://www.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.
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
 
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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