Is Your Shipment Covered?
Is Your Cargo Insured?
As a shipper, we are typically busy controlling the daily challenges of running a business including managing the finances, making new sales, ensuring product is ordered and delivered in a timely manger. We can get all of this right and forget one important component, Insurance.
One common thing overlooked is properly insuring your product and/or thinking that you are insured when you are really not. Insurance is not always needed but is often proven to be beneficial should there be any unforeseen incident in the transportation of your product.
Shippers should purchase Cargo Insurance, whether it is for domestic US transit or international shipments that addresses their specific shipping needs, contains the limits, deductibles, terms and conditions that they require. The word "surprise" should never come up, once a loss has occurred. No matter where you purchase your insurance take the time to understand all of the terms and conditions contained in the policy.
The difference between a carrier liability payment and open perils cargo insurance coverage might surprise you. Understanding this distinction is crucial for mitigating risks in your organization's supply chain and making informed decisions.
Let's break it down.
What is Carrier Liability?
If goods in transit are lost or damaged, the owner has the right to file a claim against the carrier. However, the carrier is only liable if they are proven responsible for the loss. Even then, their payout is typically limited, calculated based on the weight or shipping unit of the shipment—not the actual value of the goods.* *Carrier liability is determined by international conventions, treaties, and other domestic & international governing bodies.
What is Open Perils Cargo Insurance?
Open Perils cargo insurance provides the most extensive coverage available, protecting general merchandise against physical loss or damage from external causes, subject to policy terms, conditions, and exclusions. Unlike carrier liability, Open Perils coverage insures cargo based on its full value, regardless of weight or piece count, and can offer seamless door-to-door protection.
Carrier Liability vs. Open Perils Cargo Insurance: A Comparison
Under standard carrier liability, compensation is strictly limited based on weight or shipping unit. However, with Open Perils Cargo insurance, the full value of the shipment is protected, regardless of the transportation mode.
Example: One carton, 100 lbs (45 kg), valued at $10,000.
Carrier liability: Limited payout based on weight.
Open Perils Cargo Insurance: Covers the full $10,000 value.
Even if a carrier is responsible for shipment damage, the goods may not be covered for their full commercial value. Open Perils Cargo Insurance eliminates that concern, providing comprehensive protection against unexpected losses or damages to safeguard your business.
To obtain the right insurance for your cargo, please contact your South East World Wide (Chicago), Ltd. Sales Representative.