When you hear the word insurance, the word protection or coverage comes in our mind. There are many insurances like marine cargo insurance, freight insurance and other types of transport insurance. But one of the top amongst all in the insurance category is freight insurance. Since trade has increased by the time so has the business of transferring things from one place be it country or state to another despite the miles.
A freight insurance policy also removes the need to file a lawsuit under the company’s general liability policy. This will help you save money on applicable deductibles with both an errors and inaccuracies policy and a general liability policy. Freight insurance offers extra coverage over and above the carrier’s default security package, which is mandated by statute. A carrier’s standard policy usually protects your shipping at a fixed rate and does not vary depending on the value of the freight. Depending on the carrier, you can be charged a flat rate or a rate based on a dollar-to-pound ratio.
Freight damage is sadly yet considered a normal occurrence. It can occur as a result of any of the following factors:
- Improper packaging
- Insufficient ventilation
- Condensation of Temperature
- The weight distribution of freight is unequal.
- Theft of cargo that was incorrectly declared
- Heavy containers are placed on top of lighter ones.
- Automobile collisions
- Natural calamity
Now that you’ve heard a lot about freight insurance, how to get it, and how much it’ll cost you, it’s time to consider the key advantages of getting it. After all, you could actually recognize carrier liability and be done with it.
What are the benefits one can have if they choose freight insurance?
Reduce the chance of financial loss:
This is, without a doubt, the most significant advantage of freight insurance. If your freight was damaged or destroyed, you will be reimbursed for the cost of the freight, less the deductible. It means you won’t have to take a big financial risk.
In certain situations, the fine print of a contract can stipulate that you must use freight insurance. This is something you can look at and double-check so that you don’t end up breaking any contracts.
To prevent the risks of relying on restricted carrier liability, bear the following in mind:
Carrier liability is extremely small, and relying on it may result in you losing money if your freight is damaged or lost.
Increased mental clarity:
Finally, having good and reliable freight insurance in place would give you a lot of peace of mind. That is something that can not be forgotten at any time.
Role of freight insurance in business:
Freight insurance can help a company avoid losses in a variety of ways. No matter who is to blame for the loss, a business insurance package that includes freight insurance provides cover. You don’t have to prove carrier negligence, but you do have to prove the value of the product and the amount of the damage. This form of insurance often covers packages that are misplaced.
Furthermore, a good freight insurance policy may provide coverage that is not protected by carrier restrictions, such as strikes, and “acts of God.” The value of a shipment isn’t limited by the carrier’s bill of lading, and you don’t have to show that the harm or loss was caused by the carrier.