customs brokerage, freight forwarding and truck transportation

The Importance of Cargo Insurance

: General

The Fundamental Importance of Cargo Insurance 2017-08-24

Ninety percent or more of import cargo moves to the U.S. without any insurance coverage. While cargo insurance costs about half of a percent of the shipment's value, many (most) importers don't purchase this coverage. There are many reasons for this.
 
Learn more in a blog post from Steve Fodor of the Association For Trade Compliance.

Aside from the ramifications of decisions not to insure their cargo, Steve Fodor’s blog post addresses the issue of gaps in coverage and the pitfalls of insurance where that is expressly contracted for by the owners of the cargo or their vendors. The result of a conscious decision not to insure can end up being a costly one as the below example illustrates hypothetically:



In the above scenario, the insured owner of the cargo receives a full indemnity less the amount of their policy deductible.

If and when no insurance is placed, and reliance is solely on the liability limit the owner of the goods suffers an obvious shortfall; they still have to pay their supplier for the cargo, have to settle full freight with the steamship line or freight forwarder. They also have to pay full import duty to the government without receiving a single piece of sellable merchandise.
 
The assumption that there is no risk in transport is false.
 
The understanding that a loss will be fully covered under the (conditional) carrier’s liability is also false.
 

Assuming that any existing cargo policy coverage (especially that arranged by the shipper on CIF terms) is automatically thorough and comprehensive is also false; the outcome can be surprising in a very ugly way.
 
Milgram offers premium quality marine cargo coverage as a value added service to our customers; the cost of that is reasonable and pricing is competitive in the marketplace for this business segment.
 
Milgram’s policy is written in such a way that it covers most modern transport perils (by customary transport modes) and is “friendly” to beneficial cargo owners (it is not written with somebody else’s interests in mind and is not a throw-in that is often bundled together by brokers along with other types of commercial insurance).
 
If you are interested in receiving an offer of insurance from us please contact your sales representative or Ted Chazin tchazin@milgram.com Milgram’s Compliance and Risk Management Consultant.

 

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