Cargo Insurance covers the following:
Freight / Marine Cargo (MC) Insurance
Marine / Air Cargo Inter Island Insurance (MACII)
Asuransi Marine Cargo Open Cover (MCOC)
Asuransi Marine/Air Cargo Export Import (MACEI)
Asuransi Marine/Air Cargo In Land Transit (MACILT)
Types of Cargo Insurance
In discussing the most common insurance types, we will focus on marine cargo insurance, which often covers air freight too. Note though, that it’s also possible to buy specialized insurance cover for air freight.
Marine cargo insurance is available with various levels of cover. You will need to decide what type of insurance is most appropriate for your business, goods, and severity of risk involved in transportation. Again, it will be an easier decision to make if you know a little about each option. The first decision will be whether to purchase single or open coverage.
This type of insurance is purchased on a per shipment basis. It only covers a single shipment and is usually the best choice for businesses that make infrequent international shipments. However, if your company ships frequently, it might not be cost-effective to make insurance arrangements for each consignment.
This is a cargo insurance product that covers your shipments for a specific period, typically one year. You can cover all your goods movements under the same policy, making it a more efficient way to manage risk if you ship frequently. Having determined if you will take out insurance policies for single or open coverage, you will need to consider the level of cover that you require. A complete guide to policies would require a much longer article than this one, so we’ll concentrate on the most common types of cargo insurance coverage.
Applicable both to air and ocean cargo insurance, all-risk coverage, as its name suggests, offers financial protection in the event of most events leading to cargo damage or loss. You should be able to purchase all-risk cover for most types of goods, provided they are new, and not inherently vulnerable to breakage, spoilage, or loss.
Named Perils Cover
In contrast to all-risk insurance, named perils cover is limited to risks that are stated explicitly in the policy. Hence, this type of insurance is less comprehensive. Its primary benefit is that you can arrange cover for perils not included in all-risk insurance.
General Average and its Significance
If you typically ship by way of ocean freight, the general average principle in maritime transportation is an issue to be kept in mind. As counterintuitive as it may seem, you should consider covering it as part of your cargo insurance strategy. The principle stipulates that if some cargo is lost, jettisoned, destroyed, or damaged, due to a problem at sea, owners of all cargo aboard must share the cost of recouping the losses. Therefore, even if your goods survive the incident, you are liable to contribute towards compensating those whose cargo was lost.