How to obtain cargo insurance
Where to go when you need to get a cargo insurance policy and choosing the cover that best suits your needs.
There are a number of possible options when deciding where to go for a cargo insurance policy:
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a marine insurance broker
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a general insurance business
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a freight forwarder
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your bank
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your local Chamber of Commerce
Enterprises with specialist knowledge of this type of insurance are likely to have more claims experience and value-added services, although this may be reflected in any premium (price) you pay. It's a good idea to get quotations from a number of suppliers before you make a decision.
You'll also need to decide the form your policy should take. This will generally depend on your trade patterns.
Open cover
This is the most common form of policy. It provides great flexibility - coverage can apply to either an unlimited number of shipments within an agreed timeframe or for an indefinite period until either party cancels the agreement. Alternatively, it can cover shipments up to an agreed value. You pay an annual premium based on an initial deposit and make a final adjustment according to the actual turnover value of goods you export.
An open policy should contain:
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a description of each shipment and the departure and destination points, often completed in retrospect as part of a regular (usually monthly) reconciliation
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the maximum value payable in the event of a claim
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information on the method of valuing the goods
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terms and conditions
Voyage policy
If you don't export often, you may prefer to buy an insurance policy for a particular consignment. A voyage policy literally refers to the specific shipment for which cover is sought.