How Much Insurance Should You Purchase to Cover Your Cargo?

Anything you ship has value. The key to protecting your investment in your cargo is to ensure that it is fully protected by insurance before it leaves your location. By purchasing the right amount of cargo insurance you will be able to recover the cost of your cargo, plus any shipping and receiving costs. In some cases, other fees for permits and Customs charges may also need to be included.

Estimate the Value of Cargo

To accurately determine the value of your cargo, you will need to know how much it cost to manufacture it as well as how much it would have sold for if the transaction had been completed. If the payment has already been received, that will be the amount you use to start your calculations. You will need to include any sales tax, shipping permits, Customs charges and delivery fees as well.

Include Any Shipping Costs

Shipping costs will be different depending on the mode of travel and if there are any special considerations such as temperature controlled environment or handling instructions. In some cases, the carrier will offer shipping insurance that will cover any damage that is incurred while the cargo is in transit. You may have to purchase additional insurance if you want to protect your cargo to and from the carrier’s facility.

Anytime you purchase insurance for cargo, you should always include copies of the paperwork with the bill of lading and other shipping documents. You should also keep a copy for your records and keep it in the same file as the other paperwork so it is easily accessible if something happens to the shipment.