Importance of cargo insurance 

When you need to take your products from one place to another, it is important to be prepared, because they may run into problems on the way. 

This is why insurance is key. 

What is insurance for the transport of goods? 

Put simply, transport insurance is like a shield that protects your products while they travel from one place to another, be it by ship, plane, train or lorry. 

The fact is it exists to protect them from all types of risk, from fires to earthquakes or unexpected blows. 

And that is not all. It also covers the expenses you may incur in order to ensure that they are in the best possible condition. 

In the case of commodity policies, land insurance is more common and covers any damage that might occur during dispatch, transport and reception. 

Why is insurance important in transport 

Transport insurance plays a key role in the logistics industry and is fundamental to guarantee economic protection, legal responsibility and peace of mind during the movement of goods. 

In an environment where risks and uncertainties are constant, having proper insurance becomes essential in order to help minimize the possible economic and legal impact of accidents, damages or losses. 

This is why having recourse to this option affords benefits and advantages: 

• Safety. It offers financial support if there is damage or loss, thus avoiding additional concerns. 
• Responding to claims. If a client seeks compensation for something out of your control, insurance is key. 
• More reliability. Many clients prefer working with insured carriers, as it means they can file a claim if something goes wrong. 
• Personalized protection. You have the option to tailor the insurance to cover exactly what you need in each situation. 

Possible insurable risks in the transport of goods 

In the transport of goods, there are a series of insurable risks which can be covered by specific policies. Some of them are: 

• Robbery. The insurance company will respond when there is a robbery during the transport of the freight. 
• Damage. This covers any physical deterioration undergone by the articles during transport, be it due to a road accident, rough unloading, tipping, or collisions, among others. 
• Weather-related mishaps. Such as those generated by natural phenomena, like floods, storms, or extreme weather conditions. 
• Fires. In the vehicle as well as those that can affect the freight. 
• Faults in packaging or handling. If there is damage due to sloppy packaging, inappropriate handling, or mistakes made during loading and unloading, these risks can be covered. 
• Delays and loss of income. Some insurance policies offer the option to cover the drop in income due to delivery delays, although this can vary depending on the type of policy. 
• Defects inherent in the goods and loss of weight during transport. These risks refer to the freight’s intrinsic characteristics which could lead to their deterioration or decrement. 
• Financial loss. It refers to the financial consequences of not having the goods at one’s disposal on time, such as stoppages, fines or indemnity. 
• Salvage expenses. This is the cost of salvaging the goods or minimizing the financial impact of an incident. 
• General average. It is exclusive to the maritime environment and refers to the voluntary sacrifice of part of the cargo or vessel to safeguard the rest. 

It is important to know that transport insurance can be designed to cover one or several of these risks, depending on the specific needs of the company or person responsible. 

Documents for taking out goods transport insurance 

To take out transport insurance in Mexico, you will need to submit the documents required by the corresponding company: 

• Official identification. Either the INE (National Electoral Institute) or passport. 
• Company data. Such as the articles of incorporation document and the RFC (Federal Taxpayer Register). 
• Merchandise. Detailed information on the type of product you wish to insure, its value, description of the goods, weight, and dimensions, among other relevant details. 
• Origin and destination. For calculating the insurance policy’s geographical scope. 
• Value. You need to provide the total cost of the merchandise to be transported in order to be able to calculate the necessary cover. 
• Claims history if there is any. If the company has a record of former accidents, you may be required to submit this information. 
• Policy. It is the document that formalizes the insurance contract between the insured part and the insurance company. 
• Claim letter. This is the document submitted in the event of a claim in order to request the corresponding damages. 

Types of goods transport insurance policies 

There are several examples of goods transport insurance policies, some of which are described below: 

• Open policies. They are based on the full coverage of a specific business transaction, from the beginning of the journey right up to arrival at the specified endpoint. Therefore, it covers the option of intermodal transport, since aspects such as stopovers, transshipments, any type of storage during transit and possible stoppages of the means of transport are fully covered. 
• Single policies or for travel. They are taken out with just one contract in which the insurer’s liability corresponds to the travel with the articles transported exclusively to one client. 
• Floating or subscription policies. They cover different types of merchandise which are moved to several recipients and require different journeys in a given time. Although it is just one contract, each insured party must specify the details of the shipment. 
• Fixed price or billing policies. They cover a maximum value for a number of journeys within an insured period of time. 

They are generally used by transport companies and can be requested by exporters, importers and freight forwarders. 

Insurance for transporting goods calls for specific knowledge and, at KENSA Logistics, we are specialists in the area.