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Cargo Insurance

Importance of Cargo Insurance in Maritime Logistics

Importance of Cargo Insurance in Maritime Logistics

This essential aspect of maritime logistics provides financial protection against loss or damage of goods during transportation.

Cargo Insurance

Cargo Insurance is a vital policy in the logistics sector, providing coverage for loss or damage of goods during transit by sea, air, or ground. This insurance is key in mitigating financial risks associated with the transport of goods, covering unexpected events like natural disasters, accidents, or theft. It not only ensures the protection of the cargo's value but also meets contractual shipping requirements, often necessary for international trade. Cargo Insurance is instrumental in maintaining business continuity and instilling confidence in global trade, offering various coverage levels to meet the diverse needs of the shipping industry. Its role is crucial in ensuring a secure and efficient supply chain in the realm of international commerce.

With Average (WA)

Key Coverage under Stevedores' Liability Insurance

Your insurance includes coverage for:

  • Worker's Compensation: Workplace injury coverage.

  • Property: Owned, leased, or used property protection.

  • Vessel Maintenance: Liabilities related to vessel maintenance.

  • Hot Work: Coverage for activities like welding.

  • Scrap Operations: Protection during scrap operations.

  • Equipment Use: Loading/unloading equipment coverage.

  • Vehicle Use: Use of licensed/unregistered vehicles.

  • Pollution: Protection against pollution liabilities.

  • Penalty Payments: Coverage for penalty clauses, detention, or demurrage.

  • Exemplary Damages: Protection against punitive damages.

Free of Particular Average (FPA)

FPA coverage focuses on total loss and specified types of partial losses. It is particularly relevant for perils of the sea such as stranding, sinking, burning, or collisions with other vessels or external objects (e.g., ice). This coverage also includes damages incurred during the loading or unloading processes. A key aspect of FPA is the inclusion of General Average Sacrifice rules, which come into play when cargo is intentionally sacrificed to save the vessel and the remaining cargo in emergency situations, like severe storms.

All Risks

Offering the widest coverage, 'All Risks' insurance shields against all forms of physical loss or damage from external causes, without restriction on the percentage of loss. This comprehensive coverage is regulated by the Institute Cargo Clauses (All Risks), making it a preferred choice for shippers seeking maximum protection for their cargo.

Warehouse to Warehouse

This coverage extends from the point of origin (the warehouse where the cargo is initially stored) to the final destination warehouse. It ensures continuous protection of the cargo during the entire transportation process, including any interim storage phases, providing a seamless coverage experience.

Contingency Insurance

  • Contingency Insurance serves as a secondary layer of protection. It is particularly useful when the primary cargo insurance may be insufficient or not applicable. This insurance is essential for consignees who want to safeguard their interests, independent of the insurance provisions made by the shipper.

SRCC coverage plays a crucial role in cargo insurance by offering protection against losses or damages that are directly caused by strikes, riots, and civil commotions. This specialized form of insurance is vital in several key aspects:

  • Scope of Coverage:

    • Strikes: Protection against losses caused by labor disputes or worker strikes that can disrupt the transport or safety of cargo.

    • Riots: Coverage includes damages from violent disturbances by a group of people, which can lead to significant destruction of goods.

    • Civil Commotions: Addresses losses stemming from larger-scale public disturbances that might not reach the level of a full-blown riot but still pose risks to cargo safety.

  • Risk Mitigation in Unstable Regions:

    • SRCC coverage is particularly relevant for cargo passing through or being shipped to regions known for political instability or a high likelihood of social unrest. It ensures that the cargo owner or shipper is not left financially vulnerable due to events beyond their control.

  • Comprehensive Protection:

    • The coverage extends to a broad range of incidents, from organized strikes and labor disputes to spontaneous riots and civil disturbances. It is designed to address both anticipated and unforeseen events that can occur in volatile areas.

  • Critical for High-Risk Routes:

    • For shipments that must traverse through high-risk areas, SRCC coverage is an essential safeguard. It provides shippers and cargo owners with peace of mind, knowing their goods are protected against a spectrum of social and political risks.

  • Customizable to Specific Needs:

    • SRCC insurance can be tailored to the specific requirements of the cargo, route, and destination. This customization allows for optimal protection based on the unique risk profile of each shipment.

  • Legal and Contractual Compliance:

    • In some cases, having SRCC coverage might be a legal or contractual requirement, particularly for international shipments. It ensures compliance with shipping regulations and contractual obligations.

Strike, Riot, and Civil Commotion (SRCC)

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