If more than 90% of US imports is moving without insurance cover, you can guarantee that the majority of global freight has inadequate or no protection whatsoever!
With CMA CGM ordering nine 22,000 teu vessels and the container shipping lines appetite for ever larger ships seemingly knowing no bounds, marine cargo insurers could be pitied for the increasingly sleepless nights they face, as they worry about the massive claims that would follow any of these vessels experiencing any significant mishap.
But according to an insurer insider they have no reason to lose any sleep, as most shippers don’t even have the cover in place to register a claim.
According to sources in the US-based Association For Trade Compliance, 90% of US-bound cargo moves without any insurance coverage.
And even though cargo insurance costs as little as 0.5% of the consignments value, most US importers don’t purchase cover and UK exporters often fail to qualify that their customers cargo is protected door to door.
The most common reasons given for having nil or inadequate cover in place are:
“My business insurance covers my shipments”
Unfortunately this assumption is usually wrong, as almost no general insurance policies cover cargo in transit, or if they do they will place strict limitations on that coverage.
“My supplier covers the cargo insurance”
The terms of sale determine whether or not the exporter provides insurance coverage and since most products are purchased on an FOB basis the exporter is not responsible for insurance.
Even when goods are purchased under CIF terms they will most often be insured to arrival at the port and any damages or losses incurred after that point will not be covered.
“My shipment is the carriers responsibility”
While it’s true that carriers and forwarders cover the goods in their care, that cover is limited and in almost all cases would never cover the full value of the goods.
“Nothing bad has ever happened to my shipments”
Up to now this may be true, but could change any time.
Doing nothing could be risking tens of thousands of pounds.
Our advice is always the same; cargo insurance costs very little for the peace of mind and security it provides.