Export Insurance And Cargo Insurance: What's The Difference?
If you are an internationally-based company, you may be aware of export insurance, a specialized policy that addresses the many intricacies of shipping goods in and out of foreign ports. But you may not fully understand the concept of cargo insurance. In this article, we break down both types of coverage so that you can make an informed decision based on your business' needs.
What is export insurance?
Export insurance is a kind of specialized coverage that covers the many details of dealing with foreign countries for the shipment of goods. This policy provides the following benefits:
- Locally-admitted coverage -- this is the kind of coverage that a foreign country insists on being purchased within that country. If you do not have an insurance carrier working on your behalf, you will have to track down one in that foreign country and purchase this coverage directly from them.
- Differences in conditions coverage (DIC) -- this kind of coverage is provided by your export insurance carrier. It fills in the gaps left by locally-admitted coverage, bringing it up to American standards.
- Liability coverage--this is your basic liability insurance covering loss by negligence and so forth once your shipment lands in a port. This coverage includes legal fees, and protects you from the stress and fees you incur when dealing with foreign governments.
What is cargo insurance?
Cargo insurance usually falls under an export insurance policy's umbrella. While export insurance protects your shipment once it is in port, it does not protect it during transit unless you have cargo insurance. There are two major parts of cargo insurance:
- Open cargo policy--this coverage protects the nature of the cargo itself, such as its value and shipping costs;
- Voyage policy--this coverage protects your cargo during a specific voyage.
- War risk coverage--if you ship in hazardous zones, you can add war risk coverage to your shipment for further protection in those hostile areas.
Both kinds of policies are called cargo insurance and are designed to care for your cargo during transit, protecting your bottom line from theft, accidents, and even shipwrecks. Having this kind of policy not only protects you and your business, it enhances your reputation on an international scale. It also provides your customers with assurance and peace of mind.
Do I need this kind of insurance?
This kind of insurance is necessary for almost any international business, including transportation brokers, freight forwarders, importers and exporters, and logistics providers. It can be used for any form of shipping, such as by rail, sea, air, or truck.
Chances are you need this kind of coverage if you do business on an international scale at all. You must ask yourself, "Can my business survive if my shipment of goods is stolen or delayed?" If not (and most businesses cannot weather that kind of catastrophe without help), then you need to look into comprehensive export coverage that includes cargo insurance.
For more information about how RJ Ahmann can assist you with all your insurance needs, visit our website at www.rja.com, or call us at (800) 511-9013. We are standing by to help you get the coverage you need!
Article Source: ArticlesBase.com
