In today’s global economy, firms of differing sizes are working on growing trade across borders i.e. involving foreign markets. The global expansion of businesses provides greater opportunities for growth and, ultimately, higher ROI. The current trend of more and more Indian companies going global is hence very likely to continue in the future.
You might be excited if you have recently taken your business global by exporting your goods to foreign countries. However, the chances are that you do not know about export-import insurance too well. Several marine insurance companies in India offer export-import insurance policies, many with differentiated features and at different rates. There are also several tricky aspects and terms of the policies that you might not have heard of, one of which is limited carrier liability cover.
Let’s dig a bit deeper and understand how marine insurance companies work.
Limitation of Carrier Liability Cover
Think of the time when you hired a transporter or carrier to transport your goods overseas. During the transit, if a substantial part of your goods got damaged, you’d want the transporter to pay for the damages that occurred.
But what if the carrier is unable to compensate you for the loss?
In general, the carrier’s liability for the loss is limited and depends on the commodity type or freight class of the goods. In the instance where the damage has occurred because of weather disturbances (an act of God) or improper (or inadequate) packaging, you cannot consider the carrier to be at fault.
This is where choosing the right export & import insurance policy from a good marine insurance company matters a lot. Depending on the goods that you export or import, you can select comprehensive protection for your cargo. You can even customize the policy based on your specific requirements. For instance, you can cover damages to the goods caused by saying heating or leakage (if these are applicable to your cargo) under the marine insurance policy.
Benefits of Selecting a Suitable Export & Import Policy
You can’t completely quantify the risk involved in exporting or importing goods in your business. However, you can stay prepared for it by buying a policy that appropriately fits into your business needs. Here are some points you need to be aware of :
- International Coverage
Most of the export & import policies offered by marine insurance companies provide international covers under various Institute Cargo Clauses (ICC). Different levels of risks, as defined under ICC (A), ICC (B) and ICC (C), are covered under the policies. You can also get adequate coverage for perils like fire, lightning or even the sinking of the vessel.
The premium you pay for an export-import policy depends on the coverage. Therefore, it is crucial to check the total coverage in detail to ascertain the actual value of the various plans offered by different marine insurance companies.
- Legal Liability Coverage
In some countries, you cannot complete the export-import processes until you show the details of a valid export-import policy at the ports. The right selection of export and import marine insurance fulfills your legal obligation, which prevents possible hassles during the transit of goods.
- Lower Risk of Financial Losses
Overseas transportation of goods usually involves multiple modes, such as rail, sea, road or air. This increases the risk of damage while loading or unloading the goods, which could result in large financial losses. Having a suitable export-import policy reduces your exposure to financial loss. You can claim for losses incurred during transit from the chosen marine insurance companies.
An export-import policy acts as a bridge between you and a marine insurance company. It helps you get paid for the damages caused to cargo because of specific perils covered under the policy. If you need advice on risk management practices or selecting the right policy, reach out to SecureNow, a trusted insurance broking firm in India.