January 18, 2023
Freight & Logistics
Freight Insurance: Your Questions Answered | OneLink Holdings
Unsure if you need freight insurance? Here’s everything you need to know about this important coverage, including what it is and how it can protect your business.
When you’re shipping goods, freight insurance is an important consideration. But what exactly is it? Do you need it? How does it work? And what coverage do you need? Let’s take a look at the answers to these questions and more.
Unfortunately, accidents do happen, given the nature by which our freight travels via air, sea, road or rail. Cargo is often exposed to rough seas and unpredictable weather events, turbulence and rough landings via air and bumps in road and rail travel. Protecting your cargo by taking out freight insurance can offer piece of mind if something was to go wrong. Depending on your policy, you may be able to recover part of, or even the total value of your cargo.
What Is Freight Insurance?
Freight insurance provides coverage for your goods during transit. It can cover any losses such as theft, handling damage, or loss due to natural disasters or accidents. Depending on the type of policy you purchase, freight insurance may also cover additional costs such as storage fees and legal expenses if necessary. This insurance can be very important for businesses as it helps to safeguard against any major financial losses in case of an accident or damage that may occur with the goods being shipped. In addition, freight insurance gives peace of mind that even with potential risks involved, there is protection in place should something happen during the delivery process.
Do You Need Freight Insurance?
The short answer is yes. While most carriers offer some degree of liability protection, this won’t always be enough to fully protect you in case of a loss or damage to your goods. Having additional coverage can provide peace of mind that your shipments are protected in case the unexpected happens. Purchasing freight insurance is recommended for anyone who regularly ships valuable items as it provides peace of mind and financial protection during difficult times. While it is not compulsory to take out freight insurance, it is worthwhile especially if your shipping expensive goods.
My Freight Company offers Freight Liability?
While your freight company may provide what’s known as ‘Freight Liability’, this is a limited coverage based on the type of goods and the carrier’s tariff. This coverage will not cover the entire value of the cargo and is designed to benefit the carrier more so than the shipper. It can be difficult and time-consuming when using the carriers ‘Freight Liability’ to prove the carrier is at fault. Under the carrier terms and conditions, it will outlay minimal compensation, which may only cover a quarter of the total shipment.
How do you get Freight Insurance?
There are two main ways to obtain freight insurance; through a freight forwarder service or by purchasing through a third-party insurance company. A freight forwarded is essentially a middleman for your shipment. They will organise the shipment for you, including preparing all the necessary documentation. They will generally ask whether you want to insure your goods when they prepare your shipment information. If they don’t suggest this, you can always request for a quote which includes freight insurance. It is important if you are using a freight forwarder to review the policy they have selected for you to ensure you are happy with what is included.
When using a third-party insurance company, you will have to do your research by gathering quotes from different companies to work out the best option for you. One of the most popular and comprehensive freight insurance policies is the Maersk Cargo Insurance provided by Zurich Insurance. If you’re in Australia, QBE also offers comprehensive cargo insurance. Once you have chosen a suitable policy, you can usually book online and receive instant coverage.
How Does It Work?
When you purchase freight insurance, there will be a few steps involved. First, you will need to determine your level of coverage based on the value of your shipment and other factors like transit time and mode of transport. Once you have decided on the right amount of protection for your shipment, you will then need to complete an application and submit payment before receiving confirmation from the carrier that your policy has been issued. After that, all that’s left is simply waiting for your goods to arrive safely!
When it comes to shipping goods, freight insurance is essential for protecting yourself against potential losses or damages that may occur during transit. With so many different policies available, it’s important to do research and find the right one for your needs before making a purchase. Understanding how freight insurance works and what type of coverage options are available can help ensure that both you and your cargo are fully protected during transit – no matter where in the world they might be going!
Written By
OneLink Holdings team
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