6 Things To Look For While Buying Cargo Insurance

Mr Garg and Mr Saha, from M/s G.S. Enterprises, are the two proprietors of a renowned transport and logistics firm. Both of them have equally worked hard to make their venture a success, however, they are poles apart in their approach. While Mr Garg believes in taking all precautionary measures to ensure the utmost safety and high-quality service for his clients, Mr Saha just focuses on getting the job done. 

When Mr Garg insisted on getting cargo insurance for a very important and large consignment they had to ferry, Mr Saha denied the same stating that there is no need to buy cargo insurance online since all their truck drivers are experts and the route they are taking is safe. Yet Mr Garg went ahead to get it insured by one of the best cargo insurance companies in India. As fate would have it, an unexpected thunderstorm badly affected the consignment, damaging most of the cargo. Thankfully, Mr Garg’s farsightedness saved them from incurring huge financial losses as their cargo insurance offered them financial aid. This short incident precisely tells us why cargo insurance is needed.

So let us try to understand all that there is about cargo insurance. What does cargo insurance cover, how much does it cost, how to get cargo insurance, and what are some of the best cargo insurance companies in India–all this and more will be answered right here. Let’s get started!

What Is Cargo Insurance?

Cargo insurance is a policy that any transporter can get to ensure the safety of his cargo during transit. While transporting cargo, the goods are subjected to and exposed to many risks that might involve damage, loss, or theft, due to any unforeseen circumstances. In such cases of mishap, cargo insurance can cover the monetary loss that might be incurred.  

Cargo being transported via trucks are at the maximum risk as there are many dangers involved in getting cargo shipped. This is the reason why more and more truck owners and transporters are opting to buy cargo insurance online.

If you too want to know more about what is covered under cargo insurance and how to get cargo insurance, then continue reading. 

Things To Consider Before Buying Cargo Insurance: 

Planning to buy cargo insurance online? Don’t proceed unless you find one of the best cargo insurance companies in India. How? Here’s how:

1. Find out what does cargo insurance cover. Make sure that you get in touch with your insurance company to understand what is covered under cargo insurance. This cargo insurance coverage will vary from one company to another and is better clarified beforehand to avoid confusion later. 
2. What are the events or incidents mentioned in the insurance policy? Ask your insurance agent what does cargo insurance cover. Include basic things such as vehicle accidents, theft, complete loss/damage, partial damage/loss, renunciation, natural calamities, etc. 
3. What does cargo insurance cost? Different cargo insurance companies in India have individual policies, coverage, and costs. So if you are sitting at the wheel, wondering “Should I get my cargo insured? What does cargo insurance cost?” We’d recommend you ask insurance companies for a quotation and know how to get cargo insurance. Do pay attention to hidden charges, if any. Usually, cargo insurance is charged 0.15% of the total value of the cargo. Reasonable pricing is one of the reasons why Mr Garg always chose to buy cargo insurance online.
4. The process of raising a claim and claim settlement needs to be clear for a smooth and hassle-free process. Don’t forget to provide the company with accurate and honest details regarding the description of the cargo, its estimated worth, the extent and nature of the damage, and the expected claim amount. 
5. For businesses that heavily depend on shipping goods, such as transport and logistics industries and truck owners, cargo insurance is a must-have. It not only offers them multiple benefits but also reduces their losses caused due to damage to cargo. Unforeseen and uncontrollable external factors can cause a huge monetary loss to any business. But cargo insurance can help mitigate the liability by offering financial assistance. 

To return to the case of M/s G.S. Enterprises, had there been no cargo insurance the company would have suffered a loss of Rs 5,40,000. Fortunately, by investing a small sum of Rs 1,200 as cargo insurance for cargo worth Rs 8,00,000, the company could avoid the huge loss. We guess we need not say any more about why cargo insurance is needed!

6. While it is important to know what is covered under cargo insurance, you should also know what is not covered. Any damage/loss caused as a result of improper packaging, shipping faulty goods/products, some specific types of freights (such as inflammable materials), or specific modes of transport (such as air or railways). 

The Bottomline

We can conclude by saying that anyone who works in the transport and logistics sector should opt for cargo insurance since these can be highly advantageous in adverse situations, as we have seen in the case of M/s G.S. Enterprises. If you still have any doubts or concerns regarding the same, you can reach out to our team at Vahak to seek a solution for all your transport-related problems.