Export Insurance Versus Business Liability Insurance: Which Is Better?
You may be wondering if export insurance is good for your business or even necessary if you already carry liability coverage. If you ship goods around the world or are in the business of shipping goods from one destination to another (such as a transportation broker), then you should consider reinforcing your current policy with export insurance coverage. In this article, we explain the differences between these two types of coverage so you can determine which suits your needs best.
What is liability coverage?
Liability coverage is a basic kind of insurance policy that protects your business' assets. It is a policy that covers loss due to negligence or resulting from accidents on your company's part. Many small businesses do not even carry a liability policy, in the hopes that they will never be sued. Unfortunately, accidents do happen. Having a robust liability policy in place can save your business from bankruptcy if you are sued.
Liability policies are often the bare minimum coverage every business should have. This general policy does not protect your company against the many intricacies that are involved once you begin shipping goods into other countries.
What is export insurance?
Export insurance expands upon a liability policy, covering all the details that come into play once you begin doing business on an international scale. For example, there are certain kinds of insurance that must be purchased locally in some of the countries you may be shipping to. This is called locally-admitted coverage. Since this policy is often too basic for American standards, you may want Differences in Condition (DIC) coverage to fill in any gaps left by locally-admitted coverage.
You may also opt for cargo insurance, which covers your goods in the case of thefts and accidents during transit. A liability policy does not offer these options, so you must rely upon comprehensive export insurance coverage if you are shipping into foreign locales.
Which is best for my business?
If you do any kind of shipping on an international level, export insurance is the best way to protect your bottom line. Without it, and only using a liability policy, you are left to the mercy of anything from typhoons to piracy and no way of protecting your interest. Your shipments can be held for weeks at port as you scramble to obtain locally-admitted coverage. These potential delays and losses can cripple a small business and bring a larger one to a standstill.
A comprehensive export policy is essential to any well-insured international business company. You must also have a general liability policy in place before adding export insurance to your coverage. A reputable insurance carrier can advise you on cost-effective yet ample coverage for your business' needs.
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
