The insurance charge is not a new figure. In fact, it exists hundred of years ago because, with the rise of maritime and land trade, merchants realized that the merchandise was exposed to hundreds of dangers, from robberies to shipwreck.
Of course, like all types of insurance, its conception has evolved to become one of the most contracted by exporting companies or product manufacturers.
A brief history of cargo insurance
The insurance made their first appearance in ancient civilizations. The Greeks, Romans and Hindus were accustomed to using them to weigh the losses that could be caused when contracts with other peoples did not go well. One of the texts that include the primitive forms of transport insurance is the Hammurabi Code, which is more than 3,700 years old.
The loan to the thick Greek or the Roman nauticum foenus – which are now known as maritime and transport insurance – were contracts signed by merchant ships before a trip. The lender gave the ship’s captain a sum of money – which represented the value of the ship, the crew, the food and the merchandise – in exchange for very high interests.
If the ship arrived at the port, the captain returned the capital to the lender and he was left with a prize or percentage. But if he was shipwrecked or the merchandise was stolen, the captain kept the amount borrowed.
It could be said that nauticum foenus is one of the first registered contracts that transfer the risk to a third party.
What is cargo insurance?
Cargo insurance is a contract – insurance policy – signed by the policyholder with an insurance institution in exchange for a premium to protect the merchandise in transit.
The most common merchandise insurance modalities include:
- Air cargo insurance
- Marine cargo insurance
- Land transport insurance
Types of policies for the transport of merchandise
The main types of cargo insurance policies are divided into automatic, open, global or floating policies; individual or specific certificates and policies and securities transport certificates.
The automatic policies are purchased, usually by large corporations with high volumes of orders. Premiums are less substantial – because transport is frequent and the quantity of merchandise is high – and they are paid monthly. Individual certificates are ideal for companies with a low volume of boxes or containers and are hired per trip.
The policies values are very specific and only acquired to transport certificates, precious metals, artwork, jewellery or money.
Types of cargo insurance or export insurance coverage
Each insurer has special conditions, but, broadly speaking, they are divided into the following classes:
- Looting, theft and theft: they can be partial or total. It covers the value up to the insured limit, that is, the total amount of the goods transported
- Failure coverage: it includes the damages that the merchandise could suffer due to ship failures. (Humidity, pollution, spills, rust, crushing, breakage, bumps, etc.)
- Lack of delivery: if part of the merchandise perished in an accident or was stolen, the insurance company will give the beneficiary an amount equivalent to the items that were not dispatched
- Special risks: includes loss, theft, theft or damage of merchandise and transport due to wars, insurrections, apprehensions of foreign governments, terrorism and riots
- Minimum coverage: covers damage caused by accidents that occur during the trip, transhipment, loading, unloading and dispatch of goods, such as fires, explosions, storms, lightning strikes and the like. The insurer also responds for the damage suffered by ships, planes or trucks due to these events
Recommendations before hiring cargo insurance
As in the choice of all insurance, comparing the premium values, forms of payment and the conditions described in the policy is essential before contracting cargo insurance. To avoid any risk, be sure to:
Choose a policy that has door-to-door coverage
Some insurers issue policies that only cover the transfer of cargo from the origin to the destination, but not the damages that occur in the transhipment, unloading and mobilization of the merchandise from the port or airport to the point of dispatch.
The door-to-door insurance provides coverage throughout the trip since the order leaves the warehousing until it reaches its final destination and is received by the customer.
Check if the insurance admits claims after delivery
Some policies cover even claims made after dispatch. Although it may not seem like it, signing a contract with this clause is extremely important. Many times – on delivery – the end customer does not open the boxes or containers and, if he does it later and discovers any damage, he will issue a claim.
You must ensure that you can respond to this situation and one of the best ways to do so is to transfer the risk to the insurance company.