What You need to Know About Freight Insurance
One of the most frequently asked questions from our customers is “do I need insurance and if so, how much do I need?”
Insurance Requirements vs. Cost
The answer to the first part of that question is “yes” it is always a good idea to insure your goods when they are moving in or out of Thailand. Anytime you are working with the international market place, there is the potential for loss resulting from theft, damage to goods or the cost of excessive delays.
A responsible and experienced freight forwarder will always be more than happy to explain where you have exposure during the entire process from the time your goods leave your dock until they arrive at the specified destination.
In addition to insuring against loss, responsible freight forwarders like Eagles Air & Sea will also help you to make sure you are doing everything possible to prevent or manage the risks associated with the transfer of international cargo.
Freight Insurance Details
Cargo insurance can be customized for your particular situation. Generally speaking, cargo insurance is most important to have if your goods are traveling by ocean carrier. While ocean carriers carry insurance, their liability is limited to some extent by international maritime law. Pursuing legal means or litigation against a carrier can often be more work, take more time, and cost more than it is worth.
Another consideration when shipping internationally is that not all damage occurs while your goods are on a plane or ship. Damage, theft, and misplaced goods can happen in customs warehouses, on the loading and unloading docks as well as in pickup and delivery vehicles when on land.
Depending on the types of goods you are shipping, it is important to recognize that damage can occur from something as innocuous as fumigation of the container as well as seawater that has infiltrated the container during rough weather. Speaking of rough weather, it is important to know that during certain times of the year, weather conditions in oceans throughout the world can be especially hazardous to the extent that containers are actually lost at sea when they are tossed off of the carrier!
Be sure that your insurance contract specifies an agreed upon value of your goods as well as a finite time frame when the goods will be covered by the insurance carrier. Additionally, it is important that the contract identifies exactly what is in the shipment with an itemized description of the goods as well as the address of the point of departure and the destination.
There are many options for securing insurance, including through your freight forwarder (recommended) or a general insurance company that you may have a history with.
If You Have a Claim
If you do experience damaged goods as a result of a transport issue, it is important to work through your freight forwarder when making a claim. They are experienced in what types of documentation are needed as well as the most effective way to present a claim to the shipper. At Eagles Air & Sea, we will be happy to answer all of your insurance questions when shipping with us.
Frequent Asked Questions
What happens if there is a loss and I have under insured the damaged goods?
In that case, the compensation from the insurer would be pro-rated to a lesser amount. In effect, you are basically acting as a co-insurer and you will be sharing in the loss, along with your insurer.
Why do I need insurance? Isn’t the shipping company responsible?
Shipping companies do not provide “first party coverage”. Basically, they have liability to protect themselves if you file a claim but there may be more than one shipping company involved in the transport of your goods and you will have to be able to prove that they were negligent.
Do I need freight insurance if I already have my own policy?
You will have to discuss your actual coverage with your insurance provider. Often, things like strikes, riots, acts of war and weather related issues are not covered by a general policy.