Risk Management (Cargo Insurance)
Seamless, Custom Insurance Solutions
dMagoo through our Licensed partner provides innovative logistics insurance products to address the varied and often complex liability risks of transportation and logistics service providers. Our team has over 50 years of experience in logistics insurance, and we put our accumulated knowledge, insight, and expertise to work for you. At dMagoo, we don’t just offer logistics insurance products; we provide products customized to your business.
Whether you’re a mid-sized or a large corporation, we know that there’s no such thing as a “one-size-fits-all” logistics insurance program. That’s why we take the time to listen and ask the right questions so that our team can create a custom solution that helps manage your specific risks. dMagoo will create cost-savings solutions for our clients, because a better fit means a better price.
Additionally, our extensive experience with niche insurance programs and the feedback we receive from our clients allows us to create exclusive niche products that brings the best of breed solutions at the most cost-effective price.
What is Cargo Insurance and Why Is It Important?
Transporting goods around the world is not without certain risks. And if you have ever shipped something internationally, you realize just how many things could go wrong are completely out of your control while goods are in transit. That’s where cargo insurance comes in. Beneficial Cargo Owner (BCO) refers to the importer of record, who physically takes possession of cargo at destination. And does not act as a third party in the movement of such products.
Marine cargo insurance is the oldest form of insurance and used to protect the value of your goods from physical damage, fire, theft, and general average. Cargo insurance has to be purchased prior to the shipment starting just like car insurance has to be purchased prior to driving a car.
Question to all Beneficial Cargo Owners (BCO’s):
Would your business be badly affected if your goods were a total loss? Is your business in a financial position where it can afford NOT to insure your goods? You can’t always protect your freight from loss. In fact, the number of containers lost at sea each year is staggering and runs into the thousands.
As per WSC review (2008-2016), the WSC estimates there were on average 568 containers lost at sea each year, not counting catastrophic events, and on average 1,582 containers lost at sea each year including catastrophic events. On average, 64% of containers lost during the last decade were attributed to a catastrophic event.
The good news is insuring your goods can protect the value of your goods against potential losses that can happen while in transit during air, ocean, road and rail shipments.
All too often, BCO’s misunderstand how liability works if of loss to their goods. And the various rules and regulations surrounding the topic can make things even more complicated. This post will explain key cargo insurance information and how it can help mitigate your shipping risks.
Is Cargo Insurance A Requirement?
There is no requirement to buy cargo insurance. However, it is highly recommended so you can better protect your goods from exposure to risks—some that could be catastrophic. It’s important to weigh the insurance costs with the potential losses and collateral damage that could occur without insurance.
Keep in mind that even if you prove an ocean carrier is legally liable, for example their limit of liability is $500.00 USD per package or customary shipping unit, or the actual value of the goods, whichever is less. And air freight carriers are only liable for 19 SDR per kilo (around $24.00 USD). As you can imagine, most freight has a much higher value than these rates.
Therefore, without the proper insurance, you could lose a big part of the value of your cargo.
Who is Liable for Damage?
Some of the most common types of damage are outside a carrier’s liability, including fire, acts of God, strikes, accidents of the sea, insufficiency of packing, and more. With these regulations in place, proving a carrier is legally liable for your freight can be extremely difficult and incur huge legal costs.
Next to that, there are many companies handling your freight throughout storage and transit. It can make it difficult to trace where damage occurred or prove who is liable for said damage. With a cargo insurance policy, you are covered for these losses and don’t need to prove liability.
Protect your cargo transport with dMagoo Insurance Solutions. Our highly qualified team specializes in transportation insurance and risk management will assist you with exceptional service and a fast turnaround.
What is General Average?
If a marine carrier experiences a fire or some other extraordinary sacrifice or expenditure occurs, the carrier may declare general average. If this happens, all those who have cargo on the ship may be required to share in the cost of the expenditure. The general average adjustment process determines your contribution and will take years to conclude and the cargo will not be released until the salvage security and general average deposit are calculated and paid.
Further question for Beneficial Cargo Owners:
If a ship declares a General Average and you need to have your goods released from a port of refuge, do you have the funds and ability to put up a deposit of between 25%-40% of the cargo value? For example, a customer with a $200,000 valued cargo could have to pay at least $50,000 to simply release their cargo from the container. The freight charges were below 1% of the value!
Can I Make a Trade Deal with my Buyer or Supplier?
Simply making a trade deal with buyers or suppliers may not be enough coverage. Under cost insurance and freight (CIF) terms, they are only obligated to provide minimal coverage. If you choose to pursue this type of coverage, always closely examine the policies to make sure your cargo is sufficiently covered.
Top 3 Qualities to Look for in a Quality Cargo Insurance Provider
Many companies out there will offer cargo insurance. But finding the right one for your business may take some research. Just because an insurance provider has the highest rates doesn’t always guarantee the best coverage. You need a provider who cares about your freight. That’s why dMagoo works hard to provide:
- Top security with excellent claims services worldwide.
- All-risk coverage.Find a provider who can coverage all of your standard commodities against physical loss, or damage while your goods are in transit.
- Qualified insurance teams.With plenty of insurance experts to guide you through the purchasing and claims process, great cargo insurance providers help you navigate the complicated rules and regulations to quickly resolve claims.
Shipping Solutions are sold by dMagoo as sales agent for licensed logistics Companies