Do you Know International Cargo Transportation Insurance Clauses?
International cargo transportation is a vital aspect of the global supply chain. It involves the movement of goods and products across different countries via land, sea, or air. While such transportation has become easier in recent years, there are various risks involved in this process that can cause significant damages and losses. This is where international cargo transportation insurance comes in.
Cargo transportation insurance is designed to protect the interests of shippers, carriers, and other parties involved in the transportation process. It provides coverage against various risks, including theft, damage, loss, and other unexpected events that can occur during transit. Insurance clauses are the terms and conditions that define the scope and extent of coverage under the insurance policy. While there are various clauses that can be included in an insurance policy, the following are some of the most common ones:
1. All Risks Coverage Clause
An all-risk coverage clause provides the broadest coverage available under cargo transportation insurance. It covers all risks of loss or damage that may occur during the transportation process, except for those expressly excluded by the policy. This type of coverage is best for high-value cargo and is often required by banks, lenders, or other parties involved in international trade.
2. Free of Particular Average Clause
This clause provides coverage for cargo that suffers damage or loss only in cases of total loss of the entire shipment. It does not cover partial losses or damages that do not exceed a certain percentage of the cargo's value. This type of coverage is often used for low-value cargo or goods that are less susceptible to damage.
3. General Average Clause
This clause specifies that, in the event of a "general average," all parties involved in the transportation process will share the cost of any loss or damage that occurs during the shipment. This clause is often used in shipping lines and is designed to distribute the costs of a disaster evenly among all parties involved.
4. War and Strike Clause
This clause provides coverage against damages or loss that may occur due to acts of war, terrorism, or labor disputes. This type of coverage is particularly important for shipments that may pass through or originate from areas that are prone to political instability or conflict.
5. Delay Clause
A delay clause provides coverage for loss of income or expenses incurred due to delays in cargo delivery. It covers losses due to delay caused by any unforeseen event or circumstances beyond the control of the carrier.
In conclusion, international cargo transportation insurance is an essential aspect of the global supply chain, helping to protect against unexpected events that can lead to significant losses and damages. Different types of insurance clauses are available to provide coverage based on the type of shipment and the risks involved. Ensuring that all parties involved in the transportation process are sufficiently insured will help to promote safe and reliable international trade.
