You know the story. If you’ve shipped cargo for long enough, you’ve likely heard the horror stories of damaged cargo or experienced them yourself. Cargo damage is among one of the biggest frustrations for shippers, as the process for filing international shipping claims is lengthy, difficult, and mostly unfruitful. That’s why cargo insurance exists. Stop the problem before it occurs.
But not all cargo is eligible for any type of insurance. It comes down to how risky your product is to ship and what kind of shipping conditions your cargo is going through. Some people think they are already covered with the Carriage of Goods by Sea Act, but here’s a fun fact: you’re only insured up to $500 for your cargo by the ocean carrier. Unless you’re in the pingpong ball business, that’s most likely not enough. This is one of many reasons that getting proper coverage is an absolute necessity.
What is All-Risk Marine Insurance?
Just like its name, All-Risk insurance covers your cargo in all instances of theft, loss, or damage. There are a variety of risks that come with shipping, so it’s good to take precautions and properly block and brace your cargo. But sometimes, that is not enough to protect your cargo. (You can read our prior post where we provided a list of instances that are covered with All-Risk Marine Insurance.)
But keep in mind that not all cargo is eligible for All-Risk Marine Insurance. Insurance companies may restrict some businesses from insuring their cargo due to risk of a particular product or shipping conditions.
Is My Cargo Eligible?
Every insurance company is different when it comes to deciding what products are not eligible for All-Risk marine insurance. But if you go through a forwarder, they will take care of all the extra steps to get you insured.
Even if you are not eligible for All-Risk marine insurance, there is another option. Free of Particular Average will have limitations to what you are fully covered for, but it is better than having no insurance when something goes wrong with your cargo.
Free of Particular Average
Depending on your cargo type, Free of Particular Average still provides insurance to your cargo. Unfortunately, insurance companies won’t cover all types of products for loss or damage simply due to risk. With FPA insurance, you will be covered for whatever they deem appropriate given the product and risk of shipping conditions.
Any kind of protection is better than none.
Restricted Commodities
All insurance companies have similar limitations and eligibility rules. Interlog USA’s knowledge of restricted commodities allows us to select the best insurance for our customers. It’s important to have a conversation with your forwarder or insurance company to see what kind of insurance you are eligible for. Here is a list of a few restricted commodities that may affect insurance eligibility:
- Animals (Live)
- Antiques
- Automobiles
- Cell Phones/Smart Phones
- Software
- Dangerous Goods, Hazardous Materials
- Explosives/Fireworks
- Jewelry
- Laptops
- Nuclear Fuels
- Plants/Flowers (Live)
- Stamps
- Tobacco
- Valuable Papers
- Watches
- Yachts
Conclusion
If you do fall under one of these limitations, you can still be insured under FPA but you will not get full coverage. Our team here at InterlogUSA has 20+ years of experience with marine insurance and would love to have a conversation with you! Do not wait until you are thousands or millions of dollars in loss thinking you can just file a claim. You’ll more than likely receive $500 or less back in reimbursement.