As companies expand their manufacturing and distribution operations to a global marketplace, a stand-alone cargo policy which provides worldwide coverage for physical loss or damage to goods in transit is a comprehensive and cost-effective way to insure these exposures. Under a Falvey Cargo Underwriting policy, coverage is included for shipments by truck, rail, ocean, and air at the same policy limit for both inland shipments and imports/exports. Coverage is door-to-door including physical loss or damage while goods are loaded/unloaded. Pricing is competitive as it is discounted based on the shipping volume projected over a twelve-month period with flexibility on deductible options and valuation.
The following are questions to raise with your client when considering a stand-alone cargo policy:
- What is the annual shipping volume for goods at your risk including incoming materials from suppliers, intercompany shipments, and outbound goods to customers? If you have the risk of loss, a stand-alone cargo policy would provide coverage in all three areas whether you ship goods via your own fleet or use a variety of common carriers. Minimum premium may be as low as $1,000 a year for an annual policy with comprehensive coverage.
- Is the freight forwarder selling you “insurance”? Freight forwarders charge per transaction with no discount for volume, provide very limited coverage, and may impose a time limit for reporting claims. A stand-alone cargo policy provides more coverage for a lower rate.
- Are you relying on your trucker’s “insurance”? Trucking companies usually carry 100k of limited liability coverage which is intended to protect the trucker and will only respond if you can prove the trucker was responsible for the loss. A stand-alone cargo policy would pay the covered loss and seek recovery against the party responsible for the loss.
- Are you relying on your supplier’s “insurance”? If you import goods from overseas vendors and rely on the vendor to supply insurance, the overseas policy will provide limited coverage and filing a claim with an overseas carrier will be problematic. Arranging a stand-alone cargo policy through your licensed insurance broker will give you greater control
over coverage and an advocate when questions arise.
- Do you ship goods via ocean? Stand-alone cargo policies are an efficient way to insure against a General Average claim. Without it, you’ll be exposed to costly expenses for attorney’s fees, posting of bonds, and delays in release of your cargo by the ship-owner.