Marine Cargo Insurance
Marine Cargo Insurance is one of the oldest types of cover in the world and cover extends to provide protection for businesses operating on both a national and global basis.
A Marine Cargo Insurance policy provides cover against loss or damage to goods whilst being transported by road, rail, sea or air.
It’s designed for any business – large or small – that imports, exports and/or distributes goods around the UK, such as manufacturers, wholesalers, retailers and distributors whether you are buying or selling goods.
What cover is usually provided?
Cover is usually provided to protect against All Risks under Institute Cargo Clauses (A) (unless otherwise restricted by insurers) and cover good for the whole duration of the journey for which you are responsible and hold title of the goods
Cover is also available to include goods whilst being held in storage either at your own warehouse or a third party storage location or supply chain partner
In addition cover is available for engineer’s tools and equipment, representative’s sales samples and demonstration stock and whilst at Exhibitions.
Hauliers don’t insure your cargo; only their liability for loss or damage. In the event that cargo is damaged whilst the haulier is transporting it and assuming the haulier is negligent (therefore, liable), the compensation they pay is controlled by their contract conditions, such as RHA Conditions of Carriage 2009.
So, even if two tonnes of cargo is worth £10,000, they will only be liable to pay £1,300 per tonne under standard RHA conditions, leaving your business significantly out of pocket. Marine cargo insurance prevents such shortfalls.
Whether you run a logistics or distribution company, or your business needs to transport goods, Marine Cargo Insurance should form part of your insurance package.
Who is responsible for cover?
When cargo is moved from one place to another, numerous parties can be involved, each with their own responsibilities. The contractual agreement between buyer and seller, known as the ‘Terms of Sale’, determines who is responsible for what during the transaction. These internationally recognised terms are called ‘Incoterms’ and here is an explanation of the most commonly used Incoterms:
- Ex Works (EXW) – responsibility for everything is on the buyer. The seller need only make the goods available at their premises for collection by the buyer.
- Free on Board (FOB) – the seller is responsible for the risk and for costs of transporting the goods up to the point that the goods are safely loaded on to the vessel, after which the buyer assumes full responsibility.
- Cost, Insurance and Freight (CIF) – a contractual obligation is on the seller to purchase insurance. The insurance is assigned to the buyer at the point that goods are loaded on to the vessel, when the title and risk transfer to the buyer. Although the insurance is arranged by the seller any claims for loss or damage which occur after the point of assignment are payable to the buyer.
- Delivered Duty Paid (DDP) – the seller is responsible for the risk and for costs of transporting the goods up to the point that the goods are presented ready for unloading at the buyer’s named place. Crucially, the seller also has an obligation to clear the goods not only for export, but also for import, to pay any duty for both export and import and to carry out all customs formalities.
As your business grows and develops, your insurance needs will undoubtedly change. FOCUS will work with you to ensure that the exposure and risks faced by your business will be protected, leaving you with complete peace of mind.
To find out more, contact us.