Know the Benefits, Types, and Costs of Cargo Insurance!

Cargo insurance is a type of insurance that provides protection against loss or damage to goods or cargo transported through transportation channels such as sea, air, or land. This insurance is offered to parties involved in the shipment of goods, such as the sender, receiver, or carrier.

This insurance can protect the owner of the goods from risks such as damage, loss, or theft during the shipping process. In addition, this insurance can also provide reimbursement in the event of late delivery, legal liability costs against third parties, or evacuation and rescue costs in the event of an accident.

In the logistics business or international trade, this insurance is often required by the carrier or bank as a requirement to protect the financial interests of all parties involved in the process of shipping goods. Let;s go deeper in this TransTRACK article!

Benefits of Cargo Insurance

Here are some of the benefits of Cargo Insurance:

Protecting financial interests

This insurance can provide important financial protection for goods owners who ship cargo via transportation. In the event of damage or loss of goods during the shipping process, the owner of the goods can file a claim with their insurance to be reimbursed. This can help the owner of the goods reduce the financial loss that may arise from the damage or loss of the goods.

Reduce business risk

In business, risks are always present and cannot be completely avoided. However, by having this insurance, goods owners can reduce the business risks associated with shipping goods. This insurance can help protect the goods owner from financial and reputational risks that may arise from damage or loss of goods during shipment.

Provide a sense of security

This insurance can provide a sense of security to the owner of the goods during the shipping process. By having this insurance, goods owners can feel calm and confident that their goods are protected from the risk of damage or loss during shipping. This can help reduce the stress and anxiety that may be felt by the owner of the goods during the shipping process.

Improving business reputation

In business, reputation and trust are essential to building long-term relationships with customers and business partners. By having this insurance, companies can show that they pay attention to the safety and security of the goods being transported. In the event of damage or loss of goods during shipment, companies can show that they are ready to take responsibility and provide reimbursement to the owner of the goods. This can help improve the reputation and trust of customers and business partners towards the company.

Ensure smooth business processes

In business, time is money. If there is damage or loss of goods during shipment, this can disrupt business processes and cause delays in the delivery of goods. By having this insurance, goods owners can ensure a smooth business process as they do not have to worry about huge financial losses due to damage or loss of goods during shipment.

Provides comprehensive protection

This insurance can provide comprehensive protection against various risks that may occur during shipping, such as damage, loss, theft, and more. This insurance can provide adequate protection and help goods owners reduce the risks associated with shipping goods through transportation channels.

Types of Cargo Insurance

This insurance is a type of insurance that provides protection against damage, loss, theft or other losses to goods during the shipping process from one place to another by sea, air or land. This insurance is designed to protect the owner of the goods or the shipper from financial losses that may arise due to damage, loss or theft of goods during the shipping process. Common types of this insurance offered by insurance companies include marine cargo insurance, air cargo insurance and land cargo insurance. Each type of cargo insurance has different coverage and protection provisions, depending on the risks and needs of the goods owner or shipper.

Cargo Insurance Based on Protection

Here are some common types of Cargo Insurance offered by insurance companies:

All Risk Cargo Insurance

This type of insurance provides the most comprehensive protection against various risks that may occur during the shipment of goods, including damage, loss, theft, and more. This insurance can protect goods from unavoidable risks during shipment. However, because it provides comprehensive protection, the premium for this type of insurance is relatively more expensive compared to other types of insurance.

Total Loss Cargo Insurance

This type of insurance provides protection against total loss or loss of goods during shipment. This means that if the goods being transported are totally lost or damaged, the owner of the goods can be reimbursed according to the sum insured specified in the insurance policy. This type of insurance is more affordable compared to All Risk Cargo Insurance, but provides more limited protection.

Named Perils Cargo Insurance

This type of insurance provides protection against the risks specified in the insurance policy, such as fire, explosion, collision, and more. It is relatively more affordable compared to All Risk Cargo Insurance, but provides more limited protection. In addition, this type of insurance does not provide protection against risks that are not mentioned in the insurance policy.

General Average Cargo Insurance

This type of insurance provides protection against losses associated with General Average, which is a situation where the goods being transported are involved in an accident or emergency situation and must be salvaged. In this situation, salvage costs and losses incurred by all owners of the goods will be shared proportionally. This type of insurance provides protection against salvage costs and losses that may occur in General Average situations.

Delay in Start-Up Cargo Insurance

This type of insurance provides protection against financial losses that may arise due to delays in the delivery of goods. This insurance protects the owner of the goods from financial losses that may arise due to delays in the production or delivery of goods due to damage or loss of goods during shipment. This type of insurance is more commonly used in the manufacturing and construction industries.

Cargo Insurance Based on the Line

The following is an explanation of this insurance based on the route:

Marine Cargo Insurance

Marine cargo insurance provides protection against damage, loss, theft or other losses to goods during shipment by sea. This insurance covers shipments via ocean liner, barge, ferry, yacht or other vessel. It covers goods against various types of risks, including the risk of bad weather, damage to the vessel, theft, fire and natural disasters.

Air Cargo Insurance

Air cargo insurance provides protection against damage, loss or other losses to goods during shipment by air. This insurance covers shipments via airplane or helicopter. It covers goods against various types of risks, including bad weather, aircraft damage, theft, fire, and natural disasters.

Land Cargo Insurance

Land cargo insurance provides protection against damage, loss, or other losses to goods during shipment by land. This insurance covers shipments via land vehicles such as trucks, trains, or cars. It covers goods against various types of risks, including traffic accidents, theft, fire, and natural disasters.

Each of these types of this insurance has a different scope of protection, depending on the risks involved in the shipping process. Therefore, before choosing the right type of cargo insurance, it is important for the goods owner or shipper to understand the risks that may occur during the shipping process and choose insurance that suits their needs.

Cargo Insurance Fee

The cost of this insurance varies depending on various factors, such as the type of goods to be shipped, the value of the goods, the destination of the shipment, and the risks involved in the shipping process. Some factors that can affect the cost of this insurance include:

Value of goods

The higher the value of the goods to be shipped, the higher the cost of this insurance required. This is because the more expensive the goods being shipped, the greater the risk of financial loss that can occur in the event of damage or loss of goods.

Delivery destination

The destination of the shipment also affects the cost of this insurance. Shipping to a country with a higher risk of damage or theft may result in higher insurance costs compared to a country with a lower risk.

Item type

The type of goods to be shipped also affects the cost of cargo insurance. Items that are perishable or prone to damage or loss such as electronics or other valuables will require higher insurance costs.

Types of cargo insurance

The type of cargo insurance chosen also affects the cost of insurance. Insurance that provides a wider scope of protection and covers more risks will usually have a higher cost.

Delivery period

The length of delivery time can also affect the cost of cargo insurance. The longer the delivery time, the longer the goods will be at risk and the higher the insurance costs required.

To find out the exact cost of cargo insurance, it is advisable to consult with a trusted insurance company or insurance agent. They can assist in determining the type of insurance that suits your needs and provide an estimate of the costs required.

In delivering goods by using shipping services, the safety and security of goods is a top priority. Therefore, not only cargo insurance is important, but also the use of a reliable and effective Fleet Management System.

TransTRACK is one of the companies that offers a fleet management system that can help monitor and manage a fleet of delivery vehicles more efficiently. In addition, TransTRACK also offers cargo insurance that can provide complete protection against the risk of damage or loss of goods during shipment.

TransTRACK.CO will provide insurance for cargo for the risk of damage or loss of goods with a maximum period of 12 months. TransTRACK itself will provide this insurance in coverage for land, sea and air vehicles. With the time limit requirement for customers to notify accidents for a maximum of 7 days.