Before Buying Marine Cargo Cover, Read the Sales Contract

A shipment can be insured by the seller, the buyer, a logistics provider or more than one party. That does not mean each has the same interest or that every policy follows the goods through the whole journey.

Before choosing a transit policy, find the point in the sales contract where risk moves from one party to another. The insurance arrangement should meet that commercial reality.

Map the journey door to door

List the warehouse, inland legs, port storage, sea or air voyage, trans-shipment points and final delivery. Note who selects each carrier and who receives the transport documents.

• Commodity and packing method
• Maximum value on one vehicle, vessel or location
• Countries, ports and unusual routes
• Temperature, theft or breakage sensitivity

Agree the evidence before a loss

Commercial invoice, packing list, transport document, delivery receipt and survey evidence can all become important. Train receiving teams to note visible damage or shortage promptly instead of signing a clean receipt out of habit.

Also decide who will notify carriers and preserve recovery rights when damage is found.

One last thought

Cargo insurance begins with the contract and the route. Once those are clear, limits and clauses become much easier to test.

Coverage, exclusions, limits and claim requirements vary by insurer and policy. Read the customer information sheet and policy wording before you buy or renew.