Cargo Insurance & Understanding Risk & Liability

Logistics Series Whitepaper:

White List – Cargo Insurance

Understanding risk and liability To understand why cargo insurance is needed, it is important to understand the risks and the liability aspects of moving products internationally.

Buying international logistics services is not the same as buying a product. You are entrusting your product to a logistics supplier, but they are not liable for refunding the full value of that product if the goods are lost, stolen or damaged. Before getting to cargo insurance, the next sections should give you an overview of the risks and liability issues that you may previously have been unaware of.

It should become more apparent to you how cargo insurance takes away the risk factor that would otherwise be associated with international movements. Cargo insurance is a unique insurance and should not be confused with your liability insurances.

WHAT IS IT? According to the Oxford Dictionary risk is: A Noun; a situation involving exposure to danger. With logistics there is a danger that someone will lose out if something goes wrong, often meaning financial loss. The party with the risk at that time is effectively the party who loses. Who exactly is taking the risk may change  at different points of the transit and this is determined by the agreed INCO shipping terms.

WHAT GOES WRONG: In the vast majority of cases, nothing goes wrong. However, in most international journeys, products will need to be unloaded and reloaded more than once. Goods travel long journeys via oceans, flights and trains. So, there is always some risk.