Cargo insurance, sometimes referred to as freight insurance, provides a cost effective way of covering your freight for physical loss or damage to goods in transit. In the February issue of Inbound Logistics, Karen Kroll elaborates on the importance of Cargo Insurance. Kroll highlights the increased risks of cargo as supply lines get more complicated and more global. Theft has become a major factor, and in 2015, according to BSI Group’s Global Supply Chain Intelligence report, 2015, losses due to cargo theft hit $22.6 billion.
Despite the risks, cargo insurance is not usually required. It is a relatively unregulated insurance and most companies utilize Brokers, who by law act as fiduciaries. Brokers represent the customer, not the insurance company. Pricing, coverage and risks to the supply chain are areas in which reputable brokers are experts.
Cargo insurance is actually quite complicated and many factors need to be considered. Click here to read more about when to choose transaction-by transaction based coverage versus on an “open cargo” basis, what is included in warehouse to warehouse coverage and the rising popularity of stock-throughput policies.