Cargo Insurance: Don't Leave Origin Without It

Cargo Insurance: Don’t Leave Origin Without It

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A trucker picked up a full container of hats valued at $60,000 at the rail yard in the late afternoon, en route to the importer’s facility for a 9:00 AM appointment the following day. Stopping at a regular truck stop, the driver left the container in a secure lot to go home to sleep. The driver used a locking pin to secure the container’s hitch, but during the night, the container was stolen and never recovered.

Even if the shipper declared value for carriage, there would be no automatic right of recovery because the trucker did not act negligently. Fortunately, the insured purchased cargo insurance and the claim was paid in full, less the small deductible.

Claim Amount: $69,850 (commercial value + freight costs + 10%)

Insured’s Deductible: $500

What Happens in the Case of Cargo Loss?

Many shippers do not see the value in cargo insurance because of two reasons: they have never experienced a loss, or the loss was small and covered by the carrier’s limits of liability. Shippers often assume that their chance of loss is too small for the regular expense of cargo insurance. Some shippers believe that their “house” policy will cover any loss, while some believe that their carrier (domestic truck, NVOCC, ocean carrier, air carrier) will cover their loss. 

It’s important to note that every carrier has a limited liability, stated in the terms on the back of the bill of lading. In the example above, the carrier would probably have been limited to $500 liability for the loss, depending on how the bill of lading was noted. Counting on the carriers to cover a loss is a risky way to manage financial loss due to theft, damage or pilferage.

To get the carrier to even consider the claim, the claimant must prove what the actual loss was, doing the leg work to determine the cause of the loss and the amount; that the loss occurred while in the carrier’s possession; and that the loss was a direct result of the carrier’s negligence. This process can take weeks, if not months, and consume a tremendous amount of time, energy and labor costs.

The Value of Cargo Insurance

Many shippers do not realize that cargo insurance costs pennies on the dollar. While several factors can impact the final cost, the insurance premium for a shipment of similar value to the example above could range between $175 to $225. The peace of mind that comes with knowing that your investment is protected is well worth the policy’s small overall cost.

Each day there are, on average, 15 thefts of cargo. Why take the chance that your cargo will be one of the 15 today, tomorrow or next week? Cargo theft increases every year as the perpetrators become more sophisticated in their schemes, and as cargo volumes continue to grow. 

How to Ensure Cargo Insurance Coverage

During the month of August, Ascent Global Logistics is conducting a Cargo Insurance Awareness campaign to encourage our current and potential clients to review their current cargo insurance policies to ensure they are adequate to cover the potential losses in today’s marketplace.

If you are unsure whether your insurance is adequate, please reach out to your sales or operational team for a quote. Our team can help you minimize your financial loss and protect your assets with additional information about cargo insurance. Don’t leave origin without it!

Who said logistics has to be complicated? We certainly didn’t. Contact our team to learn more about cargo insurance.


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