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Cargo Insurance

Q: Why should I purchase cargo insurance?

A: The simple answer is to reduce your exposure to financial loss. If you're an exporter who has not been paid for the goods at the time of shipment, or an importer who has paid for all or part of the goods prior to receiving them, you run the risk of suffering a financial loss if the goods are lost or damaged during transit. Additionally, you may be required to post a bond and/or cash deposit in order to obtain release of your cargo following a general average even though there was no loss or damage to your goods. By purchasing insurance, your insurance company assumes the responsibility and can usually expedite the release of your cargo. Lastly, your sales contract may obligate you to provide ocean cargo insurance to protect the buyer's interest or their bank's interest. This is especially true when selling goods CIP or CIF. Failure to do so can not only subject you to financial loss if there is loss or damage to the goods, but non-compliance with the terms of your contract with the buyer which can lead to loss of sales and legal problems.

Q: I understand the need for insurance, but why can't I just rely on: the carrier to reimburse me for loss or damage to my goods and not incur the additional costs of insurance, the buyer's or seller's insurance, or self-insurance?

A: One, the carrier would not be responsible for your portion of general average. Secondly, the carrier is only responsible for loss or damage when it is due to their own negligence while the goods are in their care, custody or control, plus carriers are exempt from certain causes of loss or damage (up to 17 under certain international conventions). And lastly, the monetary liability of carriers is often very limited. Relying on the buyer's or seller's insurance may be a viable option, but you must be satisfied that the insurance has in fact been effected and that the insuring terms, valuation, and limits provided by each insurer on each shipment are adequate to meet your needs. Arranging your own insurance once under an Open Policy to fit your specific requirements for all your shipments would be much more simple and cost effective. Self-insurance may also be a viable option provided adequate funding is reserved to cover catastrophic losses and that you possess the resources and expertise to pursue recoveries from parties responsible for loss or damage, mitigate loss or damage worldwide when it does occur, expedite the release of cargo following a general average or other mishap during transit, investigate causes of loss and recommend changes in packaging, shipping and/or handling practices-all services provided by insurance companies when you purchase an ocean cargo insurance policy.

Letting CMS Shipping arrange your ocean air or ground cargo insurance may in fact be to your best advantage. This is especially true when you have infrequent shipments and want to avoid minimum premiums usually required by insurance companies for issuing open policies, or when providing insurance on individual shipments as they occur. Some important considerations are: the financial strength of the insurance company with which the forwarder places the insurance; the claim and loss control services available; the adequacy of coverage to fit your specific needs; and that the cost is based upon your cargo's exposure to loss and not the loss experience of all shippers insured by your forwarder's insurer.

One Number with Endless Solutions 1 (844) 688-8600 On Time All the Time!

 

Call: 1 (844) 688-8600
Reduce your exposure to financial loss Let CMS insure and protect your goods with an all risk cargo policy.
 
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CMS Shipping
31 Grand Boulevard
Ile Perrot, Qc,
Canada, J7V 4V9

Toll Free: 1 (844) 688-8600
Telephone: (514) 956-8585
Emergency 24/7: (514) 892-7226

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web: www.cmsshipping.ca


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