The protection of their goods from damage that they might sustain while being transported from one location to another or even during the loading and unloading processes is one of the main concerns of business owners. Due to this, there is merchandise insurance, a type of policy whereby the insurance provider assumes the material damages and losses that affect the material or objects transported by land, water, air, or sea.
What Is Freight Transport Insurance?
Although purchasing a policy to insure your goods is not required, you should be aware that doing so is the best course of action for securing your shipment against potential risks as it travels from its point of origin to its destination. The contracted insurer agrees to pay compensation for the claims that the insurance coverage guarantees in return for a premium.
The most comprehensive defense against potential material damage to your products, both domestically and abroad, is freight transport insurance. It is the best kind of insurance for product owners, carriers, transportation companies, and transportation middlemen like customs brokers, traders, ship brokers, etc. The final recipient of the goods is also a profile that can be protected by this kind of policy.
Why is it so important to take out freight insurance?
Freight transport in Spain is one of the main economic sectors and one of the largest sources of income for the country’s GDP (Gross Domestic Product). It is directly linked to the operation of activities such as electronic commerce, the pharmaceutical industry, the food sector or the textile industry.
For small and large companies, logistics around the transport of their goods is one of the main competitive advantages for their customers. Comply with the agreed delivery times, deliver the merchandise in optimal condition, offer an agile and simple return policy, as well as the ability to
providing a quality after-sales service are issues that will have a positive or negative impact on business growth.
What types of coverage does freight transport insurance offer?
The coverage may vary depending on the chosen insurer and the guarantees that we are willing to contract, however, in general terms, these are the most common claims included in this type of policy:
Damages resulting from an accident involving the means of transport . In case of accident of the vehicle that transports the merchandise, the policy will cover the damages suffered by the goods. If the incident occurs, for example, in a means of land transportation, situations such as overturning, bridge collapse, landslides, collision with another fixed or mobile body, sudden sinking of the road, among others, can be covered.
Merchandise theft . The insurance company will respond when a robbery occurs during the transport of the merchandise.
Damage caused by natural phenomena . Extraordinary events of nature: floods, earthquakes, volcanic eruptions, etc.
Damage from fire, lightning or explosion . Damage to goods caused by fire or explosion (except for spontaneous combustion) is covered regardless of its origin.
at the time of take out your freight transport policy, do not forget that the higher the value of the cargo, the greater the risk assumed . On the other hand, when we talk about international trade, we must take into account the most common Incoterms. In most cases, the risks of the merchandise must be borne by the buyer , while in the cases of Incoterms CIF (Cost, Insurance and Freight / Coste, Seguro y Flota) or CIP (Carriage and Insurance Paid To / Transporte and insurance paid to the agreed place of destination).