Reasons to hire cargo insurance

Protect your merchandise during its transport with cargo insurance

When it comes to international trade, transporting goods is a critical part of the supply chain, involving multiple modes of transport such as road, air, sea, and rail. However, transporting goods is not always safe as they are exposed to various risks, including damage, theft, loss, and piracy. This is where cargo insurance comes into play.

If you’re unsure why you should consider hiring cargo insurance, don’t worry, we’ll tell you all about it – what it is, the risks that cargo faces during transportation, and multiple reasons for contracting cargo insurance.

What is Cargo Insurance?

Let’s start with the basics – what is cargo insurance? It’s a type of insurance that protects businesses against loss or damage to their goods during transportation, from the moment they are loaded onto the transport vehicle until they reach their final destination. This type of insurance provides coverage for different modes of transportation, including air, sea, and road.

Cargo Transport Risks

Transporting any merchandise comes with a significant amount of risk, especially since cargo is exposed to different hazards during transportation. Here are some of the most common risks that cargo can face during transport:

Theft: This is a major risk during transportation and can occur at any point in the supply chain. Thieves usually target high-value merchandise such as electronics, pharmaceuticals, and jewelry, but any good can be lost due to cargo theft.

Damage: Cargo can suffer damage during transportation due to various factors, such as rough handling, accidents, and exposure to extreme temperatures. Businesses try to ensure that the cargo is properly packaged, labeled, and secured for transport to prevent this risk, but accidents can still happen, resulting in damaged goods.

Delay: Delays in transportation can result in a loss of revenue for businesses. These delays can occur due to various reasons such as adverse weather conditions, breakdown of transportation vehicles, and other unpredictable circumstances.

Regulatory Issues: Businesses involved in international trade are exposed to risks associated with customs and regulatory issues. These issues can cause delays in transportation and result in financial losses for businesses waiting for the cargo.

Why should you hire cargo insurance?

Any competent business that needs to import or export merchandise regularly needs to consider the risks associated with cargo transportation and take measures to mitigate them. When some of the previously described risks occur, cargo insurance provides a safety net for businesses involved and protects them against financial losses resulting from cargo damage, loss, or theft. Here are some of the main reasons for considering contracting cargo insurance:

Avoid Financial Losses: Cargo insurance provides financial protection in case the merchandise is lost, damaged, or stolen during the transportation process. This means that businesses can recover the value of their goods and cover their financial losses.

Enhanced Credibility: Having cargo insurance can enhance the credibility of businesses involved in transportation. It demonstrates that businesses are responsible and take risks seriously. Additionally, it can provide assurance to customers and partners that businesses are prepared for unexpected events and can fulfill their contractual obligations.

Peacefulness: The loss of requested goods can result in many consequences for any company or business, not only in monetary losses but also in delayed activities and, in some cases, legal problems. Needless to say, these reasons are more than enough to disturb anyone’s peace of mind. Still, it is precisely in these cases where having cargo insurance guarantees can provide peace of mind despite the negative events.

Competitive Advantage: Business competitiveness is a well-known concern for anyone who manages a company or business. Every company strives to stand out among its competitors, but achieving that goal is undoubtedly challenging. To earn the trust of clients, companies must offer security. Clients are more likely to opt for a company that provides cargo insurance than one that cannot offer the same level of financial protection.

Cargo insurance, is it worth it?

Having insurance can prevent a lot of headaches. Risking the loss of your cargo and dealing with the aftermath can be a costly and time-consuming process. By having insurance, you can transfer some of these risks to the insurance company and have peace of mind knowing that you’re covered in case of unforeseen events. Make sure to visit our website if you want to know more about Cargo Insurance.

Web: cgoforwarding.com