The Importance of Heavy Cargo Shipping Insurance

Safe and timely cargo shipping is the ultimate goal for all parties involved in the shipping industry. This is no exception for shipments destined between cities in Indonesia or other parts of the world. 

Transporting cargo to other cities, islands, or even overseas does not mean there is no risk. Unexpected events during transit can occur despite best planning efforts.

Especially if you have shipped cargo before, you are certainly aware of how many potential errors that might occur while goods are in transit. This is where cargo insurance plays a role.

Events such as road accidents, cargo theft in warehouses, or even natural disasters can cause unwanted situations requiring insurance claims. This is why, if you want to protect against loss of goods or damage to shipments, you should use insurance.

Generally, insurance is available to protect you from risk. 

There are many types of cargo insurance, and you may be confused in determining which insurance is most suitable for your shipping needs, or even still wondering if insurance is needed in your shipping process.

In this article, we will discuss the basics of cargo insurance types, give you an overview of what is and is not covered, and highlight why insuring your goods is very important when shipping them.

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What is Cargo Shipping Insurance?

Like homeowner's, auto, or life insurance, cargo insurance is a form of protection that reduces the risk of loss, damage, or theft from international or domestic shipments, ensuring your goods are shipped safely. 

Generally, without additional insurance, your shipment is already insured by the shipping service but with a predetermined limit. This means that when the shipping service's liability is admitted, the amount of compensation could be lower than the value of damaged or lost goods.

For this reason, many companies using shipping services take additional protection to ensure the safety (at least financially) of their goods. The type and price of transportation insurance will depend on the mode of transportation.

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What are the benefits of cargo shipping insurance?

Cargo insurance reduces financial loss regardless of whether your goods are damaged or not. Some common benefits include:

• All risk coverage – Cargo insurance protects against significant loss or damage caused by external factors such as theft, damage from pests, or damage due to improper handling.
• General coverage – This is a standard insurance policy for sea shipments that covers partial loss to the policyholder.
• Warehouse-to-warehouse coverage – As the name implies, this protects against loss or damage caused while your cargo is transported to and from the warehouse.
• Peace-of-mind – Securing your shipment will give you peace of mind, which means you can sit back and relax knowing your cargo is safe.

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Why is cargo shipping insurance important?

Imagine this: 

You just sent an important item with a fantastic amount, BUT you haven't insured it yet. 

The phone rings and you are informed that an accident has occurred. Sadly, your cargo is now, as they say, floating with the fish. 

Should you get cargo insurance? The answer is yes!

The shipping process has many risks as it passes through many ports during transit. The longer you leave it unprotected, the greater the risk. There are external factors to consider such as weather conditions, theft and loss of containers.

If you try to avoid compensating from your own pocket for such damage, insurance may be your best option even though it is not always necessary. Better safe than sorry!

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Read: 5 Safe Ways to Pack Fragile or Breakable Items

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Cargo Shipping Company Insurance Coverage

According to bisniskurir.com, shipping services are indeed responsible for the safety of entrusted goods. However, this responsibility is limited. 

Essentially, the costs incurred by customers are only limited to shipping charges or what can be defined as delivery fees for transportation and operational expenses. 

In other cases, some shipping services are not responsible for damage or loss of goods at all.

If there is loss, damage or shortage of goods entrusted, usually the shipping service can only bear a maximum compensation of 10% of the shipping cost. So the company will not replace the full value of the goods. 

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Types of Goods That Need to Be Insured

Ideally, all shipments need to be protected by insurance. However, this of course cannot be forced except for certain goods. 

Customers often object to paying additional insurance costs, even though the cost incurred is relatively small compared to potential losses that could occur during the shipping process.

The provision of goods that must be insured is;

–          The value/price of goods is greater than 10 times the shipping cost

–          Goods valued above Rp1,000,000 (one million Rupiah)

–          Official documents and valuable items such as ID cards, driver's licenses, vehicle registration papers, passports, diplomas, and certificates

Additionally, for the shipment of electronic goods such as mobile phones, cameras, or televisions that are prone to damage, shipping services usually recommend using insurance. The same applies to fragile items.

If you have a business, shipping insurance is crucial so that if damage occurs, customers will not be disappointed.

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Types of Cargo Shipping Insurance

In cargo shipping, there are various shipping routes such as air, land, and sea routes. Each shipping route has different insurance as well.

Thus, there are several types of insurance options that can be selected according to the type of shipment. The following are the damage provisions that can be claimed by the insurance company.

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1. ICC-C or Clause C

Compensation for damage to goods shipped receives only partial or full (total loss) coverage with limited types of damage coverage. 

Several things to note are from the amount of premiums, claim requirements, to how it refers to the claim process of the insurance itself. The guarantee under this insurance at the time of shipping is as follows:

– Explosion or fire.

– Ship stranded, sunk, or capsized.

– Transport vehicle collides with other objects outside the water.

– Unloading of goods at the port.

– General rescue conditions where cargo must be thrown into the water to save the ship.

– If there is land transportation, then before and after goods are unloaded to board the ship.

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2. ICC-B or Clause B

Similar to Clause C in its insurance, but in the ICC-B type, there are several additional protections covered by this type of cargo shipping insurance. 

Some additional protections included in this ICC-B type of insurance are as follows:

– Earthquakes, lightning, volcanic eruptions.

– Water entering containers and ships due to marine hazards.

– Goods lost during unloading and loading.

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3. ICC-A or Clause A

In this Clause A type of cargo insurance, all goods shipped will be guaranteed.

Clause A provides all-risk coverage for goods to be shipped by land, sea, or air. Moreover, its scope of coverage is broader than Clause B or Clause C.

By knowing the types of cargo shipping insurance, you can certainly choose the type of insurance that is most suitable for your shipping process. 

With insurance guarantees, it can make both you and your client feel secure about the goods that will be shipped.

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Conclusion

Although cargo insurance is not mandatory, we highly recommend its use. Do not view transportation insurance as an additional cost, but as an important part of your shipping strategy.

If your shipment volume is not large, you can ask the transportation company you work with to insure goods on your behalf. Once again, you need to show the amount and pay this insurance fee. 

If you have large shipment volumes, insurance companies can offer transportation insurance tailored to your business.

ABC Express is a cargo shipping service specializing in large and heavy goods, to remote areas in Indonesia, arriving quickly.

With a wide network covering all of Indonesia, ABC Express is able to provide fast and safe shipping to various destinations. Whether it's in-city shipping, inter-island shipping, or international shipping.

Supported by professional and trained teams, ABC Express offers responsive customer service and solutions tailored to each business's needs. With advanced technology and state-of-the-art tracking systems, customers can monitor their shipments in real-time and ensure their goods arrive on time.

ABC Express is here to help you expand your business activities to various regions in Indonesia, especially to the most remote and distant areas.

AirNav Indonesia, POS Indonesia, Kimia Farma, IKEA, and dozens of other major companies entrust their shipments to ABC Express.

Develop your company's business with ABC Express, reach customers wherever they are, we will ensure certainty, comfort and security in shipping your goods. Contact us here

Learn more about ABC Express services!

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