Cargo transport, whether by airplane, ship, rail, or truck, has inherent risks. Problems can occur during shipping that lead to damage or loss of cargo. Sometimes, insurance policies held by the carrier pay the cargo owner for the loss of assets. However, carrier policies do not necessarily cover all losses, leaving the asset owner looking to the freight broker for payment. This is where contingent cargo coverage insurance can save the day.
Reasons for Cargo Loss
Transporting freight is subject to accidents. Incidents leading to loss of cargo include
- Road accident leading to truck damage or fire
- Ship sinking or jettisoning cargo to avoid sinking
- Train crash or derailment
- Airplane crash
The risk of these types of incidents increases if the brokers are using cargo shippers registered in countries with minimal standards for the safety, maintenance, and staffing of ships or other carriers.
How to Protect Your Investment
Cargo logistics experts are an important component in the movement of goods, providing knowledge of the complex and ever-changing rules of the industry. It is good practice for freight brokers or other third-party logistics companies to carry contingent cargo coverage insurance. When cargo is lost or damaged and the carrier’s insurance refuses the claim, contingent cargo coverage insurance can protect the broker from claims filed by the cargo owner. This type of insurance will pay for legal costs to defend against the claim, or will pay if the cargo owner’s claim is successful.