Why You Should Have an Open Cargo Insurance Policy

There are five (5) insurance options for shippers to"What is the deductible?" "What are the exclusions
insure their cargo shipments.and conditions of the coverage?" "At what point
Deciding which option is the right one for a shipper isdoes the insurance coverage cease to cover your
an important decision which should be carefullycargo?" Do not let the supplier make YOUR business
thought out and reviewed on a regular basis. Howinsurance decisions. Do not relinquish control!
you secure insurance for your cargo can make a(4) Occasional shippers can purchase a Shipment
significant difference in the cost of the protectionCertificate. Although this is a more expensive way to
and the terms of the coverage that you receive.buy coverage, it may be to be the most economical
Here is a brief discussion of those options with theand efficient method for the small shipper.
key points of comparison:(5) BUY YOUR OWN "OPEN CARGO" INSURANCE
(1) Insurance can be obtained through a freightPOLICY!
forwarder or customs house broker. Most of theseThe cost of cargo insurance is small in comparison to
companies have an in-house ocean cargo policy thatthe total cost of packing, handling, and shipping
is made available to their customers. This is agoods. Bypassing the middleman (freight forwarder,
significant profit center for these companies due tocustoms house broker, overseas supplier) can yield a
the high mark-up charged to the shipper. These "allhuge savings in the cost of your shipping. You will be
purpose rates" can be much higher than the rates forthe insured. You will know what you are getting. You
your specific shipment. Despite these issues, this iswill have the right coverage to meet your specific
the preferred option for the small shipper with fourneeds. Your interests will be protected, not the
or five shipments per year. Due to the minimummiddleman's interests. If you should have a claim, you
premium required for an "Open Cargo" Policy, thisare the insured and the insurance company who
may be a more economical way to purchaseissued the policy has a vested interest in handling the
coverage. But if a shipper does enough volume, theclaim promptly and fairly. Your shipments will be
savings could be up to 50% of what he is currentlyautomatically protected with no chance of failing to
paying.insure a shipment. You will have a single point of
(2) Insurance could be secured through the carriercontact for all of your cargo issues rather than
shipping the cargo. Unfortunately, this makes thehaving to deal with multiple coverages with different
carrier the named insured, not the shipper. Thisterms of coverage from different sources. You will
protects the carrier not the shipper. If there is a loss,be free of "GENERAL AVERAGE" claims. And if you
the shipper will need to file a liability claim against thedon't know what that means, you need to
carrier and their insurance company. And theunderstand this point before you have a major
insurance company will seek to protect the interestssurprise.
of their client, the carrier, not the shipper.You know that you need cargo insurance or you will
(3) Overseas suppliers might provide the coveragerecover very little for damaged goods. The question
for YOUR cargo. This arrangement raises a numberis, "Where are you going to get it?" The answer is at
of significant questions. "Will the coverage be placedM. Silver and Associates, Inc.
with a U. S. company, or will you have to collect on aIf you have a question about cargo insurance or your
claim in a foreign company?" "What perils are coveredneed for cargo insurance, contact our cargo
by the policy (All-Risk vs. Named)?" "What language isdepartment by e-mail at To receive a cargo
the certificate written in?" "Will you be paid in dollarsinsurance quote, please download our Open Cargo
or some other currency?" "Is the cost of theInsurance Questionnaire.
insurance passed on to you and if so, at what cost?"