Mark
Supervisor sales
The Dutch excel in all sorts of positive and negative things: one of them is that we are generally insured for just about everything, often with double coverage. We are even the frontrunner in Europe regarding coverage.
Apparently, we feel good about this and it provides certainty in uncertain times. Therefore, you can also extend this line of thinking to the type of insurance which we as a logistics service provider always recommend: transport insurance. Are we at Berkman Forwarding overprotective or are we playing it too safe? After all, doing business is taking risks, and importing from another (often distant) country even more so. Just skip that transport insurance, you might say. It also saves costs!
If you feel the same way, we unfortunately have to disappoint you. We will try to explain in more detail.
Why should you actually take out transport insurance?
Without transport insurance, the owner of the goods is responsible for damage to or loss of the goods during transport. Think of damage during loading or due to incorrect stowage, the shifting of the cargo during transport, theft, temperature fluctuations, etcetera.
In some cases, the damage may be recoverable from the carrier or the stevedore involved, but success is certainly not guaranteed. You will have to prove fault/negligence of the carrier or stevedore, and the liability of the parties involved is often severely limited and usually considerably lower than the value of the transported goods.
How does this insurance differ from other business insurance policies?
Transport insurance basically offers the owner of the goods compensation for damage to or loss of the (own) goods during transport, which sounds logical.
A liability insurance policy, on the other hand, basically offers compensation for claims from third parties against the insured for damage to the goods or property of those third parties. This therefore does not concern damage to the insured's own goods, but to goods of third parties that were entrusted to the insured.
As mentioned, transport insurance specifically covers the goods themselves and also offers much broader coverage, regardless of the cause of the damage or loss. Think, for example, of specific cases in which the carrier could invoke force majeure (unavoidable accident).
In the context of sea, rail and air transport, one should also take into account similar situations in which the liability of the carrier involved is limited by mandatory legal provisions, conventions or general terms and conditions. Transport insurance can also offer a solution in those cases.
Is there a maximum to the coverage of the transport insurance and are there any basic exclusions?
In fact, transport insurance offers coverage for all risks up to the maximum insured value of the goods. However, every insurance policy has certain more or less standard exclusions, such as, for example, damage caused by gross negligence or intent of the insured himself, cyberattacks and natural disasters.
Finally, the special term “General Average,” what does it mean?
General Average refers to the situation in which costs are incurred to save a ship, crew and/or cargo, for example in the event of a fire on board or the ship becoming rudderless. The costs incurred in such cases to save ship and cargo will then be divided among all parties with an interest in the salvage. In that case, it does not matter whether your goods have suffered damage or not, you share the total costs with all stakeholders on a pro rata basis based on the value of the goods.
It is important to mention that General Average is indeed covered under transport insurance. The aftermath can take up to 7 years in which period the exact damage is being defined and checked if this can be recovered on third parties.
In short, taking out transport insurance does make sense instead of nonsense, because the costs, especially in the case of General Average, can be considerable. And yes, Berkman Forwarding can take out this insurance for you with our insurers, but that is naturally not mandatory. You are free to arrange this in your own way.
Please be aware that transport insurance is not standard, but only arranged after specific request by cargo owner.
Hopefully, we have given you a better understanding of this rather complex matter.
Do you have any questions? We are happy to help!
