Shipping and Handling: Cargo Coverage
When thinking of property insurance people naturally tend to think of something like “fire insurance” for their facility. But property coverages are much more dynamic than that – and they need to be since your product line is dynamic as well. You may get raw materials from one coast, ship to a wholesaler on another, or even have shipments that cross oceans. With all of this, you likely have very little, if any, coverage on a basic “property” policy.
Coverage for shipments is a specialty coverage that can be written several ways, all of which depend on the type of cargo, the ownership and how it’s being shipped. For instance, if you’re simply hauling your own property by truck, you may be able to add-on coverage to your current program. Whereas if you’re hauling other companies’ property, you’ll likely need a separate “cargo” policy.
Cargo, or transportation policies, can also be expanded to include shipping by other means – by train, by air or by sea. The cost, coverage and limits will depend on the maximum value of items you’re shipping, where they’re going, and other factors. Because of this, it’s important to review the shipping chain very carefully with your broker.
If items are being hauled on your behalf (e.g. if you hire a shipping company to send your product around the country), it’s likely they will at least offer to provide insurance for that product while it’s being moved. A key point to consider in this scenario is when coverage starts and ends, as that can vary by the kind of shipping agreement you have. It’s also worthwhile to invest in “contingent” coverage –a type of policy that acts as a backup in case the shipping company’s policy fails to pay.
As you can see, there are many ways to insure both your property, and the property of others, while it’s being moved. Ultimately, what best fits your needs will be highly dependent on the type of shipping and the type of products. If you have any type of property moving around, or you haul for others, chat with an ‘A’ Team member.
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