Dangers of not having insurance when shipping cargo
My sincere apologies if I am banging on about what you already know, or what I have said previously.
Most people think that if the cargo is damaged or lost, then a simple call to the insurance company will fix the problem. And if that was all there is to it, then probably it the call would suffice (albeit after following the frustrating pathway to get there).
So, if the cargo is not insured, then the shipper stands to lose the value of the sale – including any profit. And what if the cargo is considered damaged or faulty? A protracted argument could ensue leaving all parties with a bad taste in their mouth, that probably would lead to no further business between the buyer and seller even being considered. A hard earned customer gone in a flash!
But what if the vessel itself suffers damage or loss from something like a fire or rough weather? It could well lead to the shipping company calling “general average” – meaning that all the cargo owners will have to pay a percentage of the costs of this damage and/or loss!
Or, what if it’s something as seemingly simple as the cargo being abandoned at destination, or some sort of government embargo or some other unforseen occurrence? Will “you” be happy paying for charges that otherwise would and should have been paid by your customer, and not getting paid at all for your export invoice?
My (our) advice – don’t skimp and don’t leave yourself or your business open to any surprises.
Read the terms and conditions of any shipping line/freight forwarder/transport company/Customs Broker (and any other stakeholders/suppliers in your supply chain) that you deal with, and make sure that your insurance covers you for even the most unlikely of scenarios.