Customs 101: Why Most Companies Use Brokers to Buy Cargo Insurance
Cargo insurance offers a cost-effective solution for protecting goods in transit from physical loss or damage. As supply chains become more complex and global, the risks associated with cargo, including theft, have increased significantly.
- In 2015, losses from cargo theft reached $22.6 billion, highlighting the importance of insurance. Brokers play a key role, acting as fiduciaries for customers and providing expertise in pricing and coverage. Companies often choose brokers to navigate the complexities of cargo insurance, which can vary based on specific needs.
- Cargo insurance, sometimes referred to as freight insurance, provides a cost effective way of covering your freight for physical loss or damage to goods in transit.
- In the February issue of Inbound Logistics, Karen Kroll elaborates on the importance of Cargo Insurance.
Cargo insurance, also known as freight insurance, protects goods in transit from physical loss or damage. Companies often use brokers to navigate the complexities of cargo insurance, ensuring they receive adequate coverage against risks like theft, which has significantly increased due to complicated global supply chains.
Cargo insurance, sometimes referred to as freight insurance, provides a cost effective way of covering your freight for physical loss or damage to goods in transit. In the February issue of Inbound Logistics, Karen Kroll elaborates on the importance of Cargo Insurance. Kroll highlights the increased risks of cargo as supply lines get more complicated and more global. Theft has become a major factor, and in 2015, according to BSI Group’s Global Supply Chain Intelligence report, 2015, losses due to cargo theft hit $22.6 billion.
Despite the risks, cargo insurance is not usually required. It is a relatively unregulated insurance and most companies utilize Brokers, who by law act as fiduciaries. Brokers represent the customer, not the insurance company. Pricing, coverage and risks to the supply chain are areas in which reputable brokers are experts.
Cargo insurance is actually quite complicated and many factors need to be considered. Click here to read more about when to choose transaction-by transaction based coverage versus on an “open cargo” basis, what is included in warehouse to warehouse coverage and the rising popularity of stock-throughput policies.