cargo insurance: why your goods might not be covered
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Think your freight is covered door-to-door with a comprehensive cargo insurance policy? Think again. Did you know your company might even be liable for the entire cargo vessel if it sinks? We explain the loopholes to make sure your cargo is protected against all threats including sunken ships, natural disasters, cargo thrown overboard deliberately, piracy, damaged freight, mishandling, shrinkage, collision, fire, pilferage, damaged containers and more before it sails.TRANSCRIPT
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Lilly + Associates International | 305-513-9540 | 9655 NW 33rd Street, Miami FL USA | www.shiplilly.com
Are your goods ACTUALLY covered?Scenario 1: Door-to-Door CoverageYou have insurance, but much to your surprise when you go to file a claim, you only have port-to-port/airport-to-airport insurance, versus insurance covering the cargo from origin door to destination door. It is important to understand what you are covered for before shipping to make sure your cargo is covered for the duration of the shipment.
Scenario 2: Finger-PointingSome shippers, even after confirming that separate insurances are covering the freight on each mode of transportation, still face liability when filing a claim. Many carriers will finger point saying the damage happened on a separate mode of transportation and not theirs. This can be solved by using one comprehensive insurance covering the cargo for the duration of the shipment.
Scenario 3: Foreign InsuranceSure, your supplier might have insurance they organize at origin. Have you thought about filing a claim with that insurance when the time comes? If you are not aware of the best practices, language or the regional requirements of your insurance, it may be worth purchasing additional insurance domestically.
Scenario 4: Old ContainersTo increase revenue, ocean carriers are holding off on replacing or repairing faulty shipping containers. If they are not well-maintained on a consistent basis, your goods have a good chance of being damaged by water. Since often times it is very difficult to determine where and when the water damage occurred, the carriers rarely pay these claims. A comprehensive policy will go above and beyond the carrier policy to cover your freight in this situation.
Founded in 1996, Lilly + Associates International is headquartered in Miami, Florida and operates wholly-owned offices in China, Colombia, Venezuela, Panama and Guatemala. With employees and agents around the world, Lilly offers competitive import and export rates with effective door-to-door transportation and logistics solutions.
Cargo Insurance: Why Your Goods Might Not Be Covered
insuranceWhat are the threats?Sunken ships. Natural disasters. Cargo deliberately thrown overboard to lighten a ship in danger. Piracy. Damaged freight. Mishandling. Shrinkage. Collision. Fire. Pilferage. Damaged containers.
The question isn’t just if your business operation could handle the loss of your cargo… Your company could be liable for the entire ship if the vessel sinks!Not only will you lose the cost of your goods if a cargo vessel sinks, your company will also be liable to replace the entire million dollar vessel (even if you only shipped a small load). Under maritime law, this clause is known as the general average rule. This rule also covers cargo deliberately thrown overboard to save the vessel as a whole from hazards at sea to avoid imminent peril. The vessel will then bill those whose cargo arrived safely at destination, proportionately, to cover the loss of the tossed shipment.
SolutionDue to the high risk nature of transportation and logistics, we strongly recommend purchasing cargo insurance from door-to-door on every shipment. It is vital to protect your goods for the duration of the supply chain.
MAKE SURE YOUR GOODS ARE COVERED FROM DOOR-TO-DOOR WITH ONE POLICY
Lilly + Associates International, a multinational transportation and logistics company, specializes in foreign-to-foreign shipments. We realize the complexity that today’s shipper face and we aim to navigate the seas both literally and metaphorically for our customers. By specializing in foreign-to-foreign shipments, Lilly has helped hundreds of companies optimize their supply chains, allowing customers to save crucial transportation time, money and frustration.