An adage, ‘’Prevention is better than cure,’’ holds good for businesses involved in shipping. Cargo shipping poses risks like theft, damage, and human error, necessitating coverage for natural disasters and mechanical failures. With advanced technologies and new developments in international trade, the risk to cargo shipping has increased. The shipping industry is growing with the higher trade volumes and the newer risks getting added. Marine insurance has thus become compulsory for ship owners. Businesses involved in shipping and trade can avail of marine cargo insurance to secure their shipment from various perils. A special cargo insurance policy in marine insurance addresses comprehensively risks for transporting specific goods or commodities by sea. It ensures comprehensive coverage for both standard and exceptional circumstances,
What is Cargo insurance?
Cargo insurance is a type of marine insurance policy that provides coverage against the loss or damage caused to the cargo while it is in transit (via air, waterways, rail, or road) from the point of origin to the destination. There are various types of cargo insurance policies available that are customisable, and businesses can avail based on their requirement.
Marine cargo insurance policy generally provides protection against the loss or damage to cargo in transit, damages caused while loading or unloading the goods, theft, piracy, and loss due to weather contingencies. Generally, businesses that involve frequent trades or shipping of goods a frequent basis are required to have marine insurance policies to secure themselves from financial and material losses. You might be wondering if businesses with unique/distinct products that require the utmost care could also secure their goods with marine cargo insurance, right? Well, there is cargo insurance available for special products too! Such policies are known as special cargo insurance policies. Let us know more about special cargo insurance policies.
What is a special cargo insurance policy?
Special cargo insurance policies are cargo insurance policies that provide extra protection for the special products that are being shipped against the unique risks faced by this cargo. In special cargo insurance, an insurance certificate is issued separately for each shipment after negotiation, depending on your trade needs. Importantly, special cargo insurance policies are time-based, and the policy expires as soon as the shipment reaches the destination. Special cargo insurance policies are also known as voyage policies, as they offer protection for a specific voyage. It is crucial to know that the special cargo insurance policy only covers the cargo but not the ship carrying it.
Unique products like perishables, oil & gas, and beverages benefit from specialized cargo policies. Notably, businesses that are involved in infrequent trade can also consider buying special cargo insurance as the insurance certificate is issued based on each trade.
There are various such unique goods that would need special cargo insurance to protect the businesses from huge losses. Notably, the financial losses from damage to these goods can be huge, higher than normal, as they carry extraordinary risk.
Suitability of special cargo insurance policy
Special cargo insurance policies are suitable for certain businesses that are involved in trading products or items that require special care and extra protection. The nature of risk may vary each time depending on the type of product or item being shipped. The following are some of the businesses that would require special cargo insurance policies:
Perishable goods
Shipment of perishable goods like fruits, flowers, vegetables, frozen foods, etc., has the risk of delay resulting in a loss. Reasons like flight cancellations or supply chain disruption due to weather can lead to business setbacks.
Oil and gas
Punctuality is crucial in the oil and gas business, demanding careful scheduling and deep industry knowledge. This requires special care and a deep understanding of the business. Buying online cargo insurance can save businesses from possible financial damages.
Beverage business
Beverage shipments, including beer, wine, and spirits, face delays, climate changes, and time zone shifts. Hence, it is important to avail the special cargo insurance to avail the end-to-end coverage.
To sum up, special cargo insurance policies play an important role in providing extraordinary protection to insured businesses against unpreventable risks only during a specific voyage. Choosing the right type of marine insurance policy based on the nature of your business, industry-specific risks, and your business’s trade needs are extremely important.
