Types of Risks Which Make It Sense to Buy Export and Import Insurance

We are living in an uncertain time, where the world is torn between economic chaos, political risks, and war. Moreover, natural calamities can arise anytime to disrupt you and your smooth business. At the same time, there are numerous expansion opportunities available to the business. Any unforeseen situation can delay payment on exported items and thus cause huge financial losses to your business. To protect your company or enterprise, it is essential to go with the export and import insurance. The policy covers various levels of risks, and it is also accepted throughout the globe.

By purchasing export and import insurance, you can get the protection against the following risks:

Perils of the Sea

Export and Import insurance company offers financial security when the insured property is damaged due to any of the perils of the sea. Here, sudden accidents, like robbery, ship sinking, etc.; are some of the perils of the sea.

Fire

When you export or import goods via sea, there are many kinds of energy which are used in the operation of the ship. However, when it is used faultily, there is always a possibility of fire in which the ship may get damaged. In this case, the export and import insurance company would come forward to pay the compensation when the insured property is damaged due to fire.

War

Sometimes, war or conditions like war arise inside one or more countries. In such a situation, the enemy may capture the ship or cargo. The insurance company may give compensation to the insured for the destruction of the property by the enemy. However, the insurer would cover war peril only on the payment of an additional premium.

Natural Disasters

The uncertainty of nature is the most specific thing about it. Even though we humans have become so powerful and made several fantastic discoveries; it’s impossible to correctly predict the next step of nature. Natural disasters like earthquakes, floods, bad weather, lightning, etc.; can strike anytime to disturb your journey. Here, export and import insurance can be of great help as it can offer you financial coverage if the loss or damage happens due to natural perils.

In addition to the above risks, there are various other perils like maritime, Extraneous and strike perils, grounding, sinking, stranding, etc.; which can arise and disturb you financially. Here, your export and import insurance can help you.

Read More: A Glance at Export and Import Insurance

Now, when you have completely understood the different types of risks which are covered under export and import insurance, let’s discuss some more benefits of adding this policy to your insurance portfolio:

 1. Cut exposure to financial loss

Whether you are an exporter or importer, the risk of any kind can negatively affect your balance sheet. However, if you have export and import insurance policies, it is feasible to curtail the losses to some extent.

 2. Expedite the release of cargo

You may be asked to post a bond and/or cash deposit for obtaining the release of your cargo, following the general average, even though there were no losses or damages to your goods. By purchasing this insurance policy, your insurer would assume the responsibility and work towards expediting the release of cargo. The general average is a globally accepted principle, which says that if a certain type of losses or damages happens then, all the parties need to equally share the loss.

3.Contractual necessity

Your export or import contract may obligate you to buy export and import insurance to secure the buyer or seller’s interest along with their bank’s interest. In case you fail to do so, you would not only incur a financial loss if there is a loss or damage, but non-compliance with the policy terms and conditions can also lead to loss of sales and legal issues.

There are various types of export and import insurance policies, like specific, open and duty policy, etc.; which you can opt as per your business needs. Here at SecureNow, we have a team of experts who can help you by providing multiple policy quotes that you can compare to find the right policy.

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