3 Common Cargo Coverages You Are Not Thinking About

Once you have your liability coverage squared away, it is time to start thinking about cargo coverage. What are cargo insurance programs going to be right for you? Most likely the one that covers your unique risk exposures. Here are three of the most common coverages you may not be thinking about.

1. Pollution Liability

No one wants to think about spilling cargo, but it does happen from time to time. If you are transporting goods like gasoline or other hazardous material, you may want to consider pollution liability coverage.

2. Theft Coverage

As you may know, the phrase “something that fell off the back of a truck” does not refer to something that actually fell off the back of a truck. It refers to theft of goods. If there’s a chance the material you’re carrying will attract the wrong crowd, include theft coverage in your fleet’s cargo insurance programs.

3. Refrigeration Breakdown

Sometimes referred to as “reefer breakdown,” this coverage protects you if you are carrying goods that must remain refrigerated and the system breaks down. No one wants to accept a delivery of spoiled milk or moldy lunch meat.

This list represents only three of several specialized cargo insurance programs. Consider your individual situation and select the policy that’s right for you.

Is Cargo Insurance Worth the Cost?

We totally get it: Running a business is not cheap and the budget can quickly become overrun with expenditures. Materials, equipment, facilities and staff are all necessary line items you need to produce and turn a profit. But what about cargo insurance programs? Can you get by without them or are they just as critical to your company’s success?

Lack of Insurance Can Sink Your Ship

It is best to answer this question with an example of a legal principle used when transports are performed by ocean carriers. If the vessel is damaged at sea or the call is made to jettison your goods in order to save the ship, you are partly responsible for sharing and covering the losses. Carriers are not obligated to cover losses that happen for reasons beyond their control.

You could lose hundreds of thousands of dollars in goods if you do not carry insurance. This amount of money far outweighs the price of a premium for any policy. The cost of cargo insurance programs varies from roughly $0.15 to $0.35 per $100 value of the shipment and most policies cover your goods throughout the entire supply chain.

Without insurance, you could end up financially shipwrecked. However, for a modest fee, you can focus on continuing to do business and stop worrying about the state of your goods as they make their way toward their destination.