All insurance offered through wholesale cargo liability markets is not equal. Cargo insurance is typically defined as coverage of freight that is hauled by a commercial, or ‘for hire’ truck.
What Types of Events Are Covered?
The types of events that are covered by an insurance policy can significantly impact costs. When moving cargo from one warehouse to another, there are many ways the load can be lost or damaged. The following types of events are often included in the coverage:
- Dumped loads
- Water Damage
In addition to covering the value of the cargo, many policies also pay for removing debris, extracting pollutants from the wreckage and surrounding area, and preventing further loss or damage beyond the amount already suffered.
What Other Considerations Affect Costs?
Freight insurance can be complicated to underwrite. Changes in the trucking industry, safety standards, and the economy can all impact costs. Recent dollar amounts awarded from claims adjudicated through the court system can also change the perception of risk to the insurer. Insurance companies frequently consider the following factors while pricing insurance coverage:
- Shipment value
- Cost of Freight
- Extra Expense Percentage (standard 10%)
- Radius of operations
- Type of product
- Maximum loss limits
- Insured’s loss history
Policy differences are found throughout the wholesale cargo liability markets. It is essential to work with a company that knows your industry and its unique insurance coverage needs.