How your shipping company can help you with Marine Insurance

Submitted by: SPW56

I have explained in previous articles, that if something goes wrong with your export or import shipment and it is lost or damaged during the international transport movement, you are unlikely to receive the full value of the goods from your carrier. The freight company will only pay compensation if they have been proven to be at fault. In addition, their liability to pay compensation is limited according to International conventions and their standard trading conditions.

The best way to make sure that you can recover the actual value of the goods damaged or lost is to arrange specialist 'goods in transit' insurance. As with house and buildings insurance, you pay a premium and this will enable you to make a claim when you need to.

It's easy enough to find insurance for your house and contents - we are constantly being bombarded with advertisements advising us to use comparison websites to get the best deal for all our personal insurance requirements. However, it's not so easy with 'goods in transit' insurance; in order to obtain the best kind of cover for your particular requirements, you need to find a specialist broker.

But this may not be a worthwhile option if you only have a small number of international shipments per year, or if you simply do not have time to do the research. That is when your freight forwarder can help you.

Many reputable shipping companies are able to offer 'goods in transit' insurance on a 'per shipment' basis using their own open cover policy. This usually means that you pay a small premium. The premium is based on the CIF (Cost Insurance and Freight) value of the goods and the risk profile of the geographical locations relevant to the movement. The CIF value is made up of the value of the goods, plus the freight plus ten per cent.

The shipping company can quote you for this when they give you a price for the freight movement. The Freight company will issue you with a Certificate of Insurance, which you will have to produce should you to need to make a claim. When marine insurance has been effected, the cargo owner only needs to have evidence of loss to make a claim, whereas to make a liability claim against the carrier it must be proven that the carrier was at fault.

You will need to confirm your instruction to insure in writing prior to the import or export shipment commencing, but this can easily be done by email.

To summarise, it's always advisable to ask shipping companies to quote for goods in transit insurance if you do not have your own annual policy. In that way, you can claim for the full value of the goods and the value of the freight invoice if the goods have been lost, rather than settling for limited liability compensation.

About the Author

Stephen Willis is Managing Director of R W Freight Services and has over 30 years experience in the International Freight and Shipping industry. rwfreight.co.uk

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