One of the primary concerns of merchandise owners is protecting their goods from damage that may occur during transportation from one location to another or even during the loading and unloading processes. As a result, merchandise insurance exists, which is a type of policy in which the insurance company assumes the material damages and losses that affect the material or objects transported by river, land, air, or sea.
What Is Freight Transport Insurance?
Although contracting a policy to insure goods is not required, you should be aware that it is the most recommended option for protecting the transported goods against any risks that may exist during their transit from the point of origin to their final destination. In exchange for a premium, the contracted insurer agrees to pay compensation for claims covered by insurance coverage.
Freight transport insurance provides the most comprehensive protection against material damage to your products, both nationally and internationally. It is the best kind of insurance for product owners, carriers, shipping companies, and other transport intermediaries like customs brokers, traders, and ship agents. Another profile that fits well for protection under this kind of policy is the final recipient of the goods.
Why is it so important to take out freight insurance?
One of the main economic sectors and the largest contributors to Spain’s GDP is freight transportation (Gross Domestic Product). It has a direct bearing on how things like electronic commerce, the pharmaceutical industry, the food industry, or the textile industry operate.
For small and large companies, logistics around the transport of their goods is one of the main competitive advantages for their customers. Comply with the agreed delivery times, deliver the merchandise in optimal condition, offer an agile and simple return policy, as well as the ability to
providing a quality after-sales service are issues that will have a positive or negative impact on business growth.
What types of coverage does freight transport insurance offer?
The coverage may vary depending on the chosen insurer and the guarantees that we are willing to contract, however, in general terms, these are the most common claims included in this type of policy:
Damages resulting from an accident involving the means of transport . In case of accident of the vehicle that transports the merchandise, the policy will cover the damages suffered by the goods. If the incident occurs, for example, in a means of land transportation, situations such as overturning, bridge collapse, landslides, collision with another fixed or mobile body, sudden sinking of the road, among others, can be covered.
Merchandise theft . The insurance company will respond when a robbery occurs during the transport of the merchandise.
Damage caused by natural phenomena . Extraordinary events of nature: floods, earthquakes, volcanic eruptions, etc.
Damage from fire, lightning or explosion . Damage to goods caused by fire or explosion (except for spontaneous combustion) is covered regardless of its origin.
At the time of take out your freight transport policy, do not forget that the higher the value of the cargo, the greater the risk assumed . On the other hand, when we talk about international trade, we must take into account the most common Incoterms. In most cases, the risks of the merchandise must be borne by the buyer , while in the cases of Incoterms CIF (Cost, Insurance and Freight / Coste, Seguro y Flota) or CIP (Carriage and Insurance Paid To / Transporte and insurance paid to the agreed place of destination).