How we Insure the Movement of Goods
A huge part of our economy revolves around the movements of goods. Trucks run all over the city delivering goods to our stores, our homes, to and from train and terminals for shipping by rail and roads, importing and exporting consumer, commercial and industrial goods.
With the constant risk of loss of goods to theft, shipping damage, and the many laws and regulations involved, a good insurance program will help protect the seller of the goods, the purchaser of the goods, and the motor carriers involved.
In determining how to cover goods, we have to understand some basics terms of insurance
Goods are shipped come with a “Bill of Lading” which describes who is responsible for the goods shipped, which means what party must carry the insurance for the goods. Those moving goods usually limit their responsibility to less than full value.
Care, Custody, and Control – usually a person who has possession of the goods, takes a responsibility for them.
Hold Harmless – an agreement that usually restricts someone’s responsibility.
Custom Bonding – goods crossing borders, whether import or export spend time while duties and taxes are calculated and collected by various governments.
So, at any time, the buyer, the seller, or the shipper may be responsible to other parties for any loss or damage to the shipped goods. Transferring that responsibility to an insurer is usually done on various policies. One common exclusion here is Inherent Vice, where the item itself causes the loss, such a fruit that rots.
In designing your insurance policy, you need to consider:
Is this a one time or regular shipment?
Will international laws and regulations come in to play?
Will the shipper’s coverage be sufficient?
What is being shipped?
Will there be high-value items or hazardous goods?
Warehouseman’s Legal Liability – to ensure the storage of other person’s goods.
Customs and Excise Bonds – a guarantee to the government that taxes &/or duties will be paid.
Motor Cargo policy – for shippers who move goods for others. (property coverage)
Marine Cargo policy – for goods being moved on open ocean waters.
Trip Transit – coverage for owners of goods that may ship on a semi-regular basis with different carriers. This will often be added to a comprehensive commercial policy.
Vehicle Insurance – ensure vehicles are rated for the correct delivery use, or larger commercial delivery is much more detailed as to how far the vehicle travels, and what class of goods are transported, and if delivery is your own goods or the goods of others. Best to buy this correctly for the majority of your purpose, and you can purchase temporary coverage for a higher-priced category.
Liability – your legal responsibility to others for the goods you carry, and to cover negligence in shipping such as mishandling customs clearance, releasing cargo to the wrong person, or forwarding to a wrong destination.
At AMC, your commercial insurance agents are ready to set you up for the best coverage for shipping your goods, or goods of others.