Yes, buying specific transit cargo insurance is worth it as it is a protection tool to cope up with damages to cargo during transit. If something goes wrong during a voyage, you can restore your financial stability with the right cargo insurance cover.
Specific transit cargo is the best-fit insurance cover for those who send out consignment and cargo occasionally. If your business demand for cargo transit is not regular and your cargo has to be transported occasionally, specific transit cargo insurance is best suited for risk mitigation.
Advantages of buying specific transit cargo insurance:
1. Covers all mode of transport in a single voyage:
Generally, transportation of a consignment in a single voyage may involve more than one mode of transport. Specific transit insurance cover offers coverage of road, rail, sea and air movement. It covers damage to cargo, onshore or offshore. Specific transit cargo insurance covers a single transit within India. Transit insurance also covers exporting and importing of cargo from another country to India. The policy also pays for loss during air or ocean freight during international shipping.
2. Covers maximum value at risk:
Since there is no fixed sum insured, the limit of indemnity is determined on the agreed value basis. Specific transit insurance tries to cover maximum value at risk taking into account the invoice value, freight cost and the incidental expenses. Determining sum insured by using such factors ensure maximum value of the limit of indemnity required for risk mitigation.
3. All-risk protection for your cargo:
Cargo insurance offers all-risk protection coverage. Be it non-delivery, theft, earthquake, fire, heavy weather or sinking, your specific transit covers damage to cargo against such perils. There are exclusions such as damage or loss of cargo due to war, strike, riot, civil commotion, and terrorism. However, these exclusions can be covered by paying the extra premium amount. Total protection can be availed against damages to goods-in-transit with specific transit cargo insurance.
4. Easy policy issuance:
Specific transit cargo policy is issued easily and conveniently as not much information is needed. Immediate coverage is been provided under single transit insurance. A soft copy of the policy is issued immediately as evidence of transit insurance. One can buy specific transit insurance without much hassle. The policy ceases once the goods delivered to its destination.
5. Coverage for all types of cargo:
Specific transit insurance provides coverage for all types of cargo against a wide range of perils, for example, the collision of vessels. Be it perishable goods, raw material, fragile goods, high-risk nature goods or durable goods, you can cover any type of cargo. The premium amount gets affected due to the nature of the cargo. High-risk cargo or perishable cargo assumes a high-cost premium.
The policy can be customized as per the nature of the cargo, sending limits for each transaction, per location limits required, transport mode, location or any other specific needs. Depending upon the risk exposures, you can select either full risk coverage or specialized peril coverage.
Specific transit insurance offers coverage for three types of clauses:
- Inland Transit Clause (A) – All-risk coverage
- Inland Transit Clause (B) – Limited Coverage, Fire and accidental loss coverage
- Inland Transit Clause (C) – Limited Coverage, Fire
Read in detail about– Institutional Cargo Clauses in Marine Cargo Insurance
Depending upon the risk profile of cargo been transported, these clauses can be provided to the client. Single transit cargo insurance has a low-cost premium amount since the single trip is secured against various perils. It offers a maximum sum insured coverage at a low-cost premium. It can cover both domestic transit and import and export transit.
Hence, Specific transit cargo insurance is a cost-effective and convenient risk mitigation tool.
This policy is issued on an occasional basis. Specific transit cargo insurance coverage can be broadened with the inclusion of various add-on covers such as debris removal, customs duty, and damage or loss of cargo due to war, strike, riot, civil commotion, and terrorism.
It is equally important to read the list of exclusions while buying specific transit cargo insurance. Loss due to willful misconduct of insured, loss due to inadequate packaging or any other malicious damage caused to the consignment is not covered under specific transit insurance.
If the need for cargo insurance is regular and the movement of goods and cargo is frequent, then one can take the open cover policy which covers all the trips performed in a year. Otherwise, specific transit cargo insurance, also known as single transit insurance is optimum for occasional trips of cargo.
When a consignment gets damaged, it can result in massive disruptions in your business due to heavy loss but such loss should not spill over to other parts of your business so it is better to ensure all your important consignment.