Cargo Insurance

Cargo Insurance is an insurance policy which provides protection against loss or damage to international cargos in transit.

Is there a genuine need for Cargo Insurance?
Yes! The probability for loss in transit is great. Long voyages, extensive lifting, moving, loading, shifting, thieves, and bad weather add substantially to the probability for loss or damage in transit.

Who is responsible for lost or damaged cargo?
Importers/Exporters often rely on the carrier to pay for all losses or damages in transit. However, law and/or tariff restrictions limit most carrier’s liability. A list of carrier’s limits of liabilities follows:

What are the different types of Cargo Insurance?
The basic form of cargo insurance, without any extraneous risks added thereto, covers the goods against perils of the seas, (heavy weather, strandings, collisions, sinkings, etc.) fire, piracy, assailing thieves, jettisons, barratry, and all other LIKE perils. Partial losses are only paid if they reach a certain percentage. Because of the limitations of the basic cargo policy, an open policy is more frequently used.

An open cargo policy automatically covers approved merchandise that assureds are obliged to insure under terms of sale. Under an open cargo policy goods can be insured Free of Particular Average (FPA), With Average (WA), or "All Risks".

Free of Particular Average (FPA)
FPA is a limited coverage that usually applies to used merchandise, waste materials and goods shipped subject to an on-deck bill of lading. It covers partial and total losses due to FPA hazards. These hazards include the sinking, stranding, burning, or collision of a vessel or by fire, lightning, crash, or collision of an aircraft.

With Average (WA)
WA extends FPA coverage to include the hazard of heavy weather and seawater damage.

"All Risk"
The most common and broadest form of coverage is "All Risk". An "All Risk" policy insures approved general merchandise in the event of physical loss or damage from any external cause. This includes most new merchandise, properly packed for export and not unusually susceptible to loss. "All Risk" insurance does not cover all losses possible in the course of an international shipment. Following is a partial list of common exclusions to "All Risk" Insurance:

• Improper packing
• Rejection by Customs of other governmental authorities
• Loss caused by delay or loss of market
• Losses in excess of cargo policy limit
• Loss at port city more than fifteen days after discharge
• Losses inland more than thirty days after discharge
• Losses due to Strikes, Riots, & Civil Commotion
• Non approved goods
• Used goods

Whether your goods are shipped by air, ocean or land, Magic Customs Brokers, Inc. can provide you with a cargo insurance policy that best fits your needs at very competitive rates. Contact info@magicbrokers.com for more info.