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How to Get Cargo Insurance: A Simple Guide

April 14, 2023
 By Natalie Kienzle
How to Get Cargo Insurance: A Simple Guide
Last Modified: June 2, 2023
Learn the essentials of obtaining cargo insurance to safeguard your commercial freight. Find out how comprehensive coverage is just a click away.

Figuring out how to get cargo insurance is essential for shippers in our well-connected world. It’s the armor that guards your valuable cargo from unforeseen disasters. Selecting an insurance provider can be rough, but it’s important. It might seem overwhelming, but you’ll breathe easy at the end. 

When looking for insurance companies, look into associations like the American Association of Exporters & Importers (AAEI) for references. To get cargo insurance:

  1. Assess your cargo shipping insurance needs
  2. Compare the best cargo insurance companies
  3. Secure competitive insurance quotes
  4. Select the right cargo insurance policy for your business

We’ll help you find the right cargo insurance so your business is protected from life’s uncertain events.

How to Get Cargo Insurance That Protects Your Business

As a shipper, you need to protect your valuable cargo from unexpected events. In this article, we’ll guide you through the steps of how to get cargo insurance that safeguards your business. Let’s dive right in.

1. Asses Your Cargo Shipping Insurance Needs

Before you start comparing insurance providers, it’s essential to understand your specific needs. 

Consider details such as:

  • The type of cargo 
  • Its value
  • Common shipping routes you use. 

Knowing these details will help you find the best coverage for your business.

2. Compare the Best Cargo Insurance Companies

Once you’ve examined your needs, research reputable cargo insurance providers. Look for companies with a good history within the industry. 

Compare differences in the following areas:

  • Policies offered
  • Offered coverage
  • Terms and conditions
  • Customer satisfaction 

Make sure that you aren’t getting shipper’s cargo insurance confused with the limited liability coverage used by carriers. Often referred to as motor truck cargo insurance, this is for carriers and truckers. 

Look for companies and carriers that are offering insurance specific to their client’s cargo shipments. 

3. Secure Competitive Insurance Quotes

Request quotes from different providers to make sure you’re getting the best deal for what’s being offered. Always provide accurate information about your cargo and freight shipments for the best results. 

This will help insurers offer the most suitable coverage options for your business. It’s not about finding the cheapest insurance. Always keep quality in mind. 

4. Select the Right Cargo Insurance Policy for Your Business

Once you’ve done the research, it’s time to choose the right policy. Look for comprehensive coverage and the right kind of policy that meets your company’s special needs. Keep prices handy during this step for quick comparisons.

Here are some examples of policy options to consider:

  • All-risk coverage: This type of policy covers most risks, including theft, damage, and natural disasters. However, goods typically have to be new. If you’re shipping used items, you might need something different. 
  • General average coverage: This comes into play when you share space with other shippers. The policy covers your contribution to the shared losses of all cargo owners when things go wrong. Shippers that use less than truckload services (LTL) benefit from this policy.
  • Limited perils coverage: This policy covers specific risks, like fire or collision, but may exclude other events like theft or natural disasters.

At Freight Insurance Coverage, we help protect clients by offering an all-risk coverage option to all shipping quotes. We know how hard you’re working to secure your supply chain. Protecting your financial investment with cargo insurance coverage is the next step. 

how to get cargo insurance, cargo ship fire resulting in smoke in the middle of the ocean.

Why You Need Cargo Transportation Insurance

Cargo insurance is crucial because it protects your business from unforeseen losses, such as damage, theft, even natural disasters. It also ensures that your company maintains a strong reputation by covering potential losses that may impact your customers.

Product losses can happen in many ways to even the best trucking companies. We’ll go over some risks that insurance protects your business from. 

  1. The Limitations of Carrier Liability

Carriers have limited liability. This means that you may not get back the full, or even partial, value of your shipment in case of damage or loss. 

Limited Liability Payouts Per Mode of Transport

Transportation ModeCarrier Liability Payout
Air$30 per kilogram
Sea$500 per container
(US) Rail$500 per container
(Mexico) Rail$0.07 per kilo minimum
(LTL) Road$25 per pound
(FTL) Road$0.10 to $0.50 per pound
Source: ICAO, GARD, Freight Waves

Cargo insurance covers what liability doesn’t. It offers comprehensive protection, ensuring coverage beyond carrier liability insurance.

  1. Theft and Damage Risks

Cargo insurance helps lessen the effect of lost or damaged products. It’s providing coverage that pays you back for any lost value. This helps you keep your bottom line even when unexpected events take place.

  1. Protection from Natural Disasters and External Factors

Natural disasters and other external factors outside of anyone’s control can hurt your shipments. 

Some examples of events that can affect cargo shipping include:

  • Extreme weather
  • Flooding
  • Earthquakes
  • Piracy
  • Civil unrest

By having cargo insurance, you’re protected against these tragic events, ensuring your business remains unscathed.

  1. Business Interruptions and Company Reputation

Cargo insurance plays a big role in keeping a business moving. When you can get back funds through a claim, your business gets to keep going. This also helps preserve your company’s reputation. You’re demonstrating to customers that your business is reliable and trustworthy.

Service representative answering calls and looking at a computer screen.

Qualities of Good Cargo Insurance

Choosing the right cargo insurance is important for protecting your shipments. Some insurance providers are better than others. In this section, we’ll talk about the qualities of good cargo insurance. We’ll help you understand what makes a provider stand out, so your valuable cargo stays safe.

Comprehensive Load Insurance for Maximum Protection

A good cargo insurance policy should provide comprehensive coverage. This means it should cover the various risks for your shipment’s specific mode of transportation. 

This could include:

  • Accidents during transit
  • Theft or hijackings
  • Natural disasters 
  • Damage due to handling errors

Make sure the policies being offered come with extensive protection for your shipments. This helps maintain your business’s financial stability and reputation in the long run.

Customized Cargo Insurance Policies for Your Unique Needs

Every business is different, so your insurance policy should be adapted to your specific requirements. Great providers can offer customized policies, allowing you to select coverage options that best suit your business.

There might still be some coverage limitations, but a good company should still be able to offer extensive options.

Types of cargo that often need customized solutions include:

  • High-value items: Businesses shipping luxury goods, artwork, or expensive equipment may require specialized coverage.
  • Perishable goods: Items like food or medications may need insurance that covers losses due to spoilage or temperature changes.
  • Hazardous materials: Shipping hazardous materials, such as chemicals or explosives, requires unique coverage to address potential dangers.
  • Oversized or heavy cargo: Businesses that ship oversized or heavy items may need specialized insurance that includes special permits.

With customized cargo insurance, you can make sure your special shipping needs are covered. This helps protect your items and keeps your business safe.

Trustworthy Insurers with Proven Financial Stability

Choosing an insurer with a strong financial background is important as well. Trustworthy insurers make sure claims are paid on time and without hassle.

Here are some points to consider when looking for a financially stable insurer:

  • Credit ratings: Check the insurer’s credit rating from agencies like A.M. Best or Standard & Poor’s. The higher the rating, the more likely the company is to have the funds needed to fund claims.
  • Claims payment history: Look for insurers with a good track record of paying claims within a consistent time frame that doesn’t stall your business. This also shows their commitment to customers.
  • Stability and experience: Insurers with a long history in the industry have proven their financial stability over time. They can use their valuable expertise for your benefit.
  • Positive customer reviews: Check for reviews from satisfied customers who have had claims paid without any issues. No company is perfect, but you would want to stay away from any with a long history of bad comments.

When you pick a trustworthy insurer with proven financial stability, you can trust that your cargo insurance claims will be handled efficiently. 

Top-notch Customer Service for Your Peace of Mind

Finally, good cargo insurance providers should offer excellent customer service. Quality customer service ensures that you receive support when you need it most. 

Here are some examples of what to look for in top-notch customer service:

  • Quick response times: A great insurance provider responds to any questions and concerns about your policy. Getting in touch quickly shows they respect their customer’s time.
  • Helpful assistance: A company’s staff should be knowledgeable and ready to help with any issues. This might even mean going over step-by step procedures with you. 
  • Clear communication: The insurer should explain your policy and coverage options in a way that is easy to understand. Policies can get complicated, so having someone break it down is helpful. 
  • Personalized support: Good customer service means the insurer understands your specific needs. You’re not just a number, so solutions are tailored accordingly.

Quality customer service means having a little less stress to deal with when it comes to domestic or international shipping needs. No matter what your cargo insurance costs are, make sure the provider makes you feel like a priority. 

Benefit From Cargo Insurance Provided by Freight Insurance Coverage

In the end, getting the right cargo insurance is key to protecting your business from unexpected risks and money loss. At Freight Insurance Coverage, we know how important it is to have trustworthy and complete insurance for your valuable cargo. Our skilled team can show you how to get cargo insurance that fits your specific needs. We’ll make sure your shipments are safe at every stage.

Choose Freight Insurance Coverage for:

  • Cargo insurance made just for your shipping needs
  • Expert help and advice from our experienced team
  • Risk-free shipping quotes that include insurance estimates

Don’t let your business face possible risks alone. Freight Insurance Coverage can guide you through the complicated world of cargo insurance with ease. 

Call us at (866) 975-0749 to talk about your shipping insurance needs and get a risk-free quote now. Keep your cargo, your business, and your peace of mind safe with Freight Insurance Coverage.

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