What is International Cargo Transport Insurance?
International cargo insurance is a type of commercial insurance that provides compensation if cargo is lost, damaged or stolen while in transit from one place to another.
Due to the unique nature of cargo transportation, including long distances, long transportation times, transit through multiple modes of transportation, weather changes, and many other risk factors, cargo transportation insurance is crucial when transporting goods internationally.
Cargo Transport Insurance Business Opportunities
It covers natural calamities such as lightning, tsunamis, earthquakes, or accidents such as grounding, collision and sinking of ships, as well as external perils such as fire, theft, damage and malicious behavior of those on board.
Import and export goods transport insurance provided by Zic Logistics; Transport insurance geographical coverage covers the world; It provides comprehensive insurance for import and export business such as sea transport, land transport, air transport, railway, express delivery, etc., with low discounts.
Types of insurance for products shipped internationally
The following insurance categories are general classifications for international shipments of goods:
CIF Insurance
In international trade, CIF insurance is a common type of insurance. Cargo, insurance and freight are all covered by CIF insurance. In this type of insurance, the seller is responsible for the cost of the insurance and the risk associated with the transportation of the goods from the port of origin to the port of destination. In this case, the buyer is not required to purchase additional shipping insurance.
Fraud insurance
In international trade, FOB insurance is a popular type of insurance that covers only the cost of goods and insurance; Buyer is responsible for shipping costs. In this type of insurance, the seller only needs to purchase insurance for the item; Buyer must purchase additional shipping insurance.
All risk insurance
The most comprehensive cargo insurance is called “all risks” and covers risks such as theft, natural disasters, war and transportation-related perils. Cargo owners can get adequate insurance cover through all risks.
Partial insurance
By opting for insurance coverage for the risk of cargo loss, cargo owners can opt for partial insurance for risks such as cargo loss, loss and damage.
About CIF Value, Sum Insured, Insurance Rate and Insurance Premium
Sum Insured = CIF Price × (1 + Insurance Bonus Rate)
Premium = Sum Assured × Rate
Since the insurance amount is calculated based on the CIF (or CIP) price, when an external quotation is made, or when the buyer makes a request to the seller, the CFR (or CPT) price must be changed to CIF (CIP). Price to insure CFR (CFR) on behalf of the seller. The CFR (or CPT) price under the contract should not be calculated directly based on the CFR price, but should be converted to the CIF (or CIP) price to calculate the amount and insurance premium before purchasing the relevant insurance.
When importing by CIF: Insured Amount = CIF Value × (1 + Insurance Markup Rate)
When importing as per CFR: Amount insured = CFR price × 1.1/(1-(1+insurance markup rate) × r), where r is the insurance rate. Please find my city on the relevant website of “Insurance News” (city center) and add the insurance rate for investment insurance object.
When imported FOB: Insurance Amount = (FOB Freight + Sea Freight) × 1.1/(1-(1+Insurance Bonus Rate) × r).
Note: As per insurance company regulations, if war insurance and strike insurance are insured at the same time, the rates will not be cumulative and will still be calculated based on the rate of one insurance type only. That is, whether one person is insured or two persons are insured, the insurance rate is 0.8‰.
How to buy international cargo transport insurance
Purchase with a global freight forwarder
International freight forwarders usually provide cargo insurance services to cargo owners. International freight forwarders can purchase cargo transportation insurance for cargo owners, saving cargo owners the time-consuming task of handling it themselves. They can provide professional advice and support.
Buy insurance directly
In order to communicate and negotiate directly with insurance companies regarding insurance terms and indemnification requirements, cargo owners can choose to purchase cargo transportation insurance directly from the insurance company.
However, compared to entrusting the purchase of insurance to an international freight forwarder, the cargo owner has to bear more risk and responsibility on his own.
Cargo transport insurance operation process
- Assign the client to fill up the insurance information form and provide name of the insured, details of the product, sum insured, purpose, ship information etc.
- According to the insurance company nominated by the pre-insurance customer, the agent will issue an insurance pre-insurance information form for the customer to check and confirm the relevant information.
- After the formal policy is prepared and confirmed by the customer, the formal policy and freight insurance will be effective and the agent will issue the original policy and mail it to the customer.
- Settlement of Expenses: The client and the trustee settle the insurance premium as per the sum assured and the pre-agreed rate as stated in the insurance policy.
International cargo transportation insurance considerations
Check the product carefully before buying insurance
Before purchasing international cargo transportation insurance, cargo owners should carefully check the quantity, quality, packaging and marking of the cargo to ensure that the cargo meets the transportation requirements to avoid difficulties in insurance claims due to problems with the cargo.
Choose a regular insurance company while buying insurance
While selecting an insurance company, cargo owners should choose those with good reputation and strong power so that they can get timely compensation in case of loss.
Please read the policy terms carefully while purchasing insurance
Cargo owners should read the insurance terms carefully before buying insurance to understand the insurance coverage, premium, deductible, indemnity value etc. If you have any questions about the insurance terms, you should consult the insurance company or international freight forwarder in time.
In short
International cargo transport insurance is an important insurance that cargo owners must purchase when transporting goods. Purchase of insurance not only reduces the risk and liability of the cargo owner during the transportation of goods, but also ensures the safety and integrity of the goods during transportation, giving them full protection and guarantee. To protect the safety and integrity of the goods during transport and to minimize the risk and liability of the cargo owner