The risks associated with trading around the world have preoccupied most merchants for centuries. Indeed, when goods are moved, they are subject to risk and their value may be lost in whole or in part for various reasons. As an entrepreneur, this can be very important for your company.
3 main types of risks
3 Load clauses (A, B and C)
A – This is considered the most comprehensive all-risk policy, protecting you against the consequences of most problems, excluding strikes and wars. Keep in mind that when dealing with a dangerous zone during your ship’s passage, piracy is actually considered an act of war. If you want to keep this to a minimum, consider taking out specific coverage.
B – This covers a number of common risks on a reasonably attributable basis. Be aware that it is indeed possible to attribute responsibility or perhaps even guilt between different parties to a transaction.
C – This is the most restricted type of policy. For example, it can only cover accidental damage.
Other classifications of insurance policies
Marine – This applies to air and sea freight. It covers loading/unloading, weather conditions and vessel or aircraft issues.
Truck cargo – This covers theft while a vehicle is unattended, along with damage to the goods due to movement or collision.
trip – Traders who trade infrequently can opt for specific cover with a policy that specifies the places of origin and destination. If the goods have already arrived, the policy will lapse. That’s why you’ll have to do it all over again the next time you need such coverage.
Open cargo – This is the best option for regular exporters or importers. This is for an agreed time frame or total value, or both. So if you need to export thousands of goods in the next 6 months, you can actually cover that value. The service provider does not need to know where or when the goods are moving.
Tips for choosing the best provider
Start by approaching a general company to get a quote. You can even ask for referral or recommendations from reputable companies that use this service frequently. However, keep in mind that ocean freight insurance is a specialist area. So if you need this, it is wise to look for an expert.
To ensure a competitive deal, it is advisable to test the market from time to time on renewal. More information listed here.