3 Reasons Why You Shouldn't Neglect Cargo Insurance

Did you know that the global shipping industry is worth over $300 billion annually? With such a high valuation, it goes without saying that there are countless opportunities to invest in this thriving market.

If you’re thinking about getting into the shipping business, you’ll need to invest in the correct insurance coverage – especially if your company deals with transporting goods on a regular basis. Luckily, there are many different types of insurance policies available for businesses like yours. One of the most important types of insurance policies is cargo insurance. This type of policy covers expenses incurred as a result of damaged or lost cargo during transport. The following blog post will explain three reasons why you shouldn’t neglect cargo insurance as an owner or CEO of a shipping company.

Your Cargo Is Worth Billions

The first reason you shouldn’t neglect cargo insurance is because your cargo is worth billions. This is a fact that too many people forget when they’re shipping goods overseas. The average shipping container holds roughly $25,000 worth of goods. If your business specializes in shipping a few thousand of these containers per month, you’re dealing with a considerable amount of product value. This product value is worth investing in cargo insurance to ensure your goods arrive at their destination safely. If you don’t purchase cargo insurance, you risk losing billions of dollars worth of goods. That’s not a risk you want to take.

Insurance Helps Limit Losses

The second reason why you shouldn’t neglect cargo insurance is because it helps limit losses. If a disaster inflicts major damage to your goods, you’ll be able to claim funds from your insurance company to help offset the cost of repair or replacement. If you don’t have cargo insurance, these costs will be completely on you. This can put a major strain on your business. If you do have cargo insurance, you can file a claim to receive funds from the insurance company to cover the cost of repairs or replacements. This helps limit your losses, especially if the disaster was completely out of your control. You should note that cargo insurance doesn’t cover every loss that occurs during a transport. To receive funds, you’ll have to prove that damage or loss was due to specific circumstances outlined in your policy. This is why you should always read your policy carefully before making a claim.

Fraud Is A Constant Problem In The Shipping Industry

The third reason why you shouldn’t neglect cargo insurance is because fraud is a constant problem in the shipping industry. Cargo insurance is paid out on a claims basis. This means that if you file a claim, you’re asking the insurance company to pay you for damages or losses that you reported. Unfortunately, fraudulent claims are extremely common in the shipping industry. If you don’t have cargo insurance, you’re at risk of being swindled out of money by dishonest people. This is why you should always purchase cargo insurance whenever you ship goods. Your policy will contain specific language that will outline what you need to do in order to receive payment. Always follow these guidelines carefully to avoid being accused of fraud.

More Companies Are Faking Claims In The Shipping Industry

The fourth and final reason why you shouldn’t neglect cargo insurance is because more companies are faking claims in the shipping industry. In fact, it’s estimated that close to 90% of all cargo claims are fraudulent. These fraudulent claims cost the shipping industry $40 billion every year. That’s a serious problem that needs to be addressed. In order to combat this rising trend, more and more insurance companies are using specialized software to detect fraudulent claims. If you try to file a fraudulent claim, these software programs will pick up on it and deny payment. This can be extremely costly for your business. If you purchase cargo insurance, you won’t have to worry about triggering these software programs. Your policy will already outline what types of losses you can file a claim for. That way, you can rest assured that your payment will be approved.

Don’t neglect insurance as a shipping company owner

If you own a shipping company, you owe it to yourself to purchase cargo insurance. This type of insurance helps protect your company from the unfortunate event that a disaster occurs. If your goods are damaged or lost during transport, you’ll be able to file a claim to receive funds to help offset the cost of repair or replacement. In addition to protecting your company, cargo insurance can also help you secure future business. If you’re working with a shipping broker to secure shipments, they may ask you to provide proof of cargo insurance. If you don’t have cargo insurance, you will likely lose the shipment contract. In order to avoid this situation, make sure that you purchase cargo insurance as a shipping company owner. This will help protect your company and ensure that you’re able to secure future business.