Cargo insurance – how to insure goods against unforeseen circumstances

What is cargo insurance?

Cargo insurance is a specific type of insurance covering the carriage of goods. It applies to all modes of transport, including cars, rail, planes and ships. The main purpose of cargo insurance is to provide additional protection for the cargo being transported. There is domestic and international insurance, depending on the nature of the transport. Cargo insurance is also known as transport insurance and property in transit insurance.

Who is cargo insurance for?

• goods distributors
• trade enterprises
• manufacturing plants
• transport and forwarding companies

However, cargo insurance is intended for any person ordering the transport of goods. Especially with regard to valuable cargo that has to travel a long way. It is also worth noting that in the case of container transport, it is difficult to prove the fault of the carrier in order to obtain compensation from his liability insurance.

Also read: Rules and regulations pertaining to transport on a tow truck

Is cargo insurance mandatory?

Cargo insurance is not mandatory, but it is a useful addition to the standard policy. It allows you to avoid serious consequences resulting from failure to meet the terms of the contract, as well as delays resulting from them.

What is the scope of cargo insurance and how does it work?

The scope of cargo insurance depends on the offer of the particular insurance company. Most often that includes:

• cargo damage
• theft
• robbery
• vehicle accident
• loss of transported goods
• specific random events

Many insurers offer cargo insurance in several variants that cover other situations. The most basic scope of protection covers damages to goods as a result of random events, such as fire, hail, hurricane, earthquake, or even a vehicle accident. Cargo insurance covers the period of the transport itself, as well as other activities necessary for its implementation, such as loading or reloading.

Insurance of goods in transport – car transport

A car that is transported by land, sea and air is treated like any other cargo. Thus, the carriage of a car by other means of transport is covered by cargo insurance. Even if the transported car is registered and has OC and AC coverage, very often the scope of these policies does not cover damages occurring during transport. However, the scope of the AC policy and the cargo insurance may sometimes cover the same situations, without mutual exclusion. In this case, the owner of the vehicle may file a claim for compensation under AC insurance, while the company ordering the transport of the car may exercise its rights under cargo insurance.

Cargo insurance and carrier’s OC – differences

• the scope of protection of the carrier’s OC policy is limited to the fault of the carrier
• the OC policy does not cover damages to the load resulting from force majeure or the properties of the goods
• the carrier’s OC protects the interest of the transport company, while cargo insurance protects the interest of the goods owner
• property in transport insurance also applies to transport by a private or hired vehicle, while the OC policy covers the company providing transport services

What does OCP insurance include?

OCP is third party liability insurance for a road carrier who professionally deals with the transport of goods. It is a voluntary policy that protects the carrier in the event of damage to the transported cargo or its theft. Similarly to the OC policy, it is usually concluded for a period of 12 months, but it is addressed to transport companies. Unlike cargo insurance, it covers the carrier’s liability and not the cargo itself.

Check out: Domestic transport – what license is needed for transport within the country?

What does cargo insurance not cover?

Exclusions to the insurer’s liability can be found in the general terms and conditions. They may vary depending on the insurance company and the selected package. Typically, cargo insurance does not cover:

• works of art
• live animals
• documents
• damages resulting from alcohol consumption by the driver of the vehicle
• damages resulting from incorrect loading, labelling or loading of the goods

Cargo insurance is a real form of securing the interests of the owner of the goods. It allows you to protect yourself from the negative consequences of theft, accidents and random situations. Remember that in many cases the carrier’s OC is not enough to get full compensation for the damage incurred.