Understanding Risks & The Importance of Cargo Insurance

Posted by Thomas J Omalley

Do Not Overlook Cargo Insurance

Cargo Insurance is crucial due to the current act that limits uninsured ship-owners to $500 per unit. It does not matter if you have $200,000 worth of equipment inside of that unit; you will only receive $500 for that “container”. The limits set in place by the Hague/COGSA act protect uninsured ship-owners, but also consist of various loopholes.

For example, ocean carrier coverage does not hold the shipowner liable if the enemies seize the ship during times of war, or if the ship is sinking and the crew has to throw the cargo overboard to live. Unless your plan is to throw your crew overboard in order to save cargo, you NEED insurance.

Browse through the paragraphs below to review and understand the risks and woes of the sea. It’s better to address the cargo risks now, before you lose expensive cargo in an accident.

In which case, you’d probably look like this after hearing about the accident.

Reaction When You Realize Your Cargo Sank

And then, you realize you could have protected your assets, but chose not to.

When Your Cargo Sinks and You Don't Have Insurance

 

Barratry

The term Barratry refers to the event of a confiscated ship and/or cargo, due to an unlawful act. Regardless of the culprit, if the police seize your cargo, or if the events cause the ships demise, you’ll need coverage for your entire load.

Collision

Cargo ships do not have the ability to avoid accidents as this driver did.

 

Lucky Accident Avoided - Cargo insurance blog
Meaning, even if you see a ship miles ahead, it may still collide with yours, ruining ample cargo. Fog, congested shipping lanes, and deplorable weather add to the collision risk as well. Since this is something that can occur at any time, with no warning, insurance coverage is vital.
Other risks include piracy and deliberate destruction from government officials, in which case the ship-owner is not liable for the damages. For more information on how you can adequately protect your investments and your business, please visit our
main page.

 

(The accurate emotions depicted above are courtesy of reactiongifs.com)