Posted by Why Get Cargo Insurance?
You sent a consignment of pricey industrial components to a customer in another nation. Moisture, dust, and damage are all prevented by properly sealing the components. These products are then packed into cartons and securely fastened to pallets before being transported into the final freight container.
You relax as the container leaves your port and travels until you turn on the television and learn about a horrible storm on the route your cargo is on. And now you’re concerned: Is your package genuinely secure? Are you on the point of losing?
Dubai logistics companies go to great lengths to ensure that your cargo shipments are loaded safely and securely both on board and in transit. However, there is always the potential that your items will be destroyed due to inclement weather, accidents, or other unforeseen events. While logistics companies in Dubai give enough coverage, it is important to be double covered with additional cargo insurance to reduce losses.
Cargo insurance may be purchased based on a number of criteria, including the type of cargo being transported, the volume, value, perishability, and so on, as well as the mode of transportation, such as land, sea, or air.
Cargo Insurance Types
Cargo insurance comes in a range of packages, each with its own set of coverages and limitations. To clarify, we will explain insurance for various sorts of shipment.
Insurance coverage varies based on the mode of transportation, the nature and value of the goods being transported, and the origin, destination, and route.
1. Land / Haulier Cargo Insurance
This refers to land-based freight. Trucks, or any other road or rail vehicle used to transport products inside the UAE or throughout the GCC region (where authorized), may be used as modes of shipping. Land cargo insurance mainly covers damages caused by collisions, road accidents, vehicle overturning, and theft.
Depending on the commodities, additional coverage may be required to cover the loss of perishable products caused by malfunctioning refrigeration or heating systems, as well as wear and tear during transit.
2. Marine Cargo Insurance
This is for sea-borne freight. Ships go to and from abroad destinations, including Dubai and the UAE. The typical marine cargo insurance coverage includes loss or damage caused by loading and unloading, piracy, extreme weather, or other disasters while the shipment is at sea and owned by the logistics business.
Similarly to land cargo insurance, additional coverage for perishable, sensitive, explosive, or hazardous cargo can (and should) be added based on the value and nature of the items.
3. Air Cargo Insurance
This applies to air freight cargo. Transportation is place via regular aircraft or specialized freight jets. Air Cargo Insurance covers against loss or damage caused by loading and unloading, air turbulence, bad weather, or other incidents while the cargo is in transit or under the custody of the logistics company.
In general, air cargo insurance policies will require additional riders or coverage for hazardous, perishable, or delicate goods.
Types of Insurance Coverage
There are three main types of insurance policy coverage, which vary based on the premium and coverage offered. While All Risk and Named Perils coverage are available for all modes of shipment or transit, General Average coverage is limited to marine transportation.
All Risk
All-Risk Coverage is a broad insurance coverage that addresses the most common causes of cargo loss or damage, including carelessness or improper packing, cargo capture, customs objections, and labor dishonesty.
All Risk Coverage, despite its name, excludes the following:
- Shipping carelessness or neglect.
- Inherent vice occurs when cargo or quality deteriorates due to environmental factors.
- Cargo or freight abandonment
- Customs refusal
- WSRCC stands for war, strikes, riots, and civil unrest.
- Failure to collect or non-payment
- Other examples of force majeure include earthquakes, war, pollution, infestation, and more.
Named Perils
Named Perils (or Free of Particular Average) coverage protects against losses due by particular incidents, such as:
- collision, sinking, or derailment of a ship
- Severe weather and earthquake
- Non-delivery due to particular circumstances.
- For example, a fire or theft.
General Average
When at sea in an emergency, the ship may dump cargo to preserve lives while minimizing loss or damage to remaining supplies. According to the law, all participants with a financial interest in the trip must share the loss evenly.
This means that all cargo owners whose products are being transported aboard a vessel that has sustained damage while at sea will share in the losses caused by the damage to their cargo. This frequently forces cargo owners who have suffered little damage to compensate other cargo owners whose shipments were destroyed or lost.
Insurance coverage for general average losses is not typical and must be expressly requested. It is highly suggested that all cargo owners have general average coverage since the financial damages under general average in the event of an emergency may occasionally exceed the financial value of their actual cargo.
Get your cargo insured
Cargo insurance costs vary depending on the kind of coverage, shipment value, product nature, origin and destination, and mode of transportation. Choose the appropriate insurance coverage to limit the risk of cargo loss or damage while providing peace of mind.
Consult with a professional logistics agency in Dubai to determine the best insurance policy and coverage for your cargo shipments to and from the UAE.