Countless goods are transported every day. Still: every movement of goods generally brings along the risk of damages or even loss of goods, even if transport processes are planned in detail beforehand. This risk exists regardless of transport distance and mode.

Transport insurance may help to minimize financial risks involved. The insurance coverage may vary, depending on the type of insurance. “Damage events can be manifold and so are types of insurances. Single transport sections can be insured as well as the whole transport door-to-door, all risks included”, Philipp Küffner, Deputy Branch Manager in Bremen, says. But why is having a transport insurance important? Here are some aspects:

Damages to goods may be caused by vibrations in loading or unloading processes, by penetration of moisture into container or other transport cases or by improper stowage – to name some examples. And even though it rarely happens, a total loss of goods for example caused by rough sea conditions during an ocean journey, for example, cannot be completely ruled out. “Even a detailed planning cannot cover such unforeseeable events. That is an immanent risk when moving goods”, Philipp Küffner says.

Minimizing financial risks

Transport insurances may minimize financial risks in regards to the values of goods. “Regardless of the value of goods, we recommend taking out transport insurance”, Philipp Küffner explains. “The liability for loss and damage of goods whilst in the care of a freight forwarder may not cover the total damage. It depends on the type and value of goods.”

In case of damage, the transport insurance will simplify the regulatory processes for the claimant.

Another added value of transport insurance is the simplification of regulatory processes for the claimant. “After a claimant reported damage, the insurance company would start the regulatory process, so that for example the value of the goods is compensated soon”, Philipp Küffner says. And: ”transport insurance may also cover an imaginary profit.”

Nothing is a must

In general, transport insurances can individually be taken out. It is possible just to cover damage occurring during pre-, main- or on-carriages, for instance. Whether or not insurance needs to be taken out may also be part of the Incoterms which provide internationally binding supplier conditions. “For example the Incoterm CIF (cost, insurance, freight) includes transport insurance till the goods arrive at the port of arrival. In this case, the consignor has to take out insurance”, Philipp Küffner explains. However, our specialist recommends insuring goods door-to-door, all risks.

“When goods are damaged during a transport, it later may be difficult to identify the reason for the damage”, Philipp Küffner gives an example. “That may delay processing the damage.”

Not to be excluded

Seldom, cases of damage may become significantly more expensive than “only” the loss of goods and profit. The “worst case”: damaged parties have to pay when it comes to general average.

A transport insurance may offer protection in special cases.

“Parties having cargo on board an ocean going vessel for which a general average is declared are held accountable according to a pro rata standard for the general average costs”, Philipp Küffner explains. “Depending on the level of damage, the costs may vary strongly. In such special cases, transport insurance may protect the insured one from bigger financial damage.”

The insurance premium depends on different factors. “The insurance premium is not only influenced by the type and the value of goods, but also by the country of receipt respectively the final point of destination”, our logistics specialist explains.

Our team is happy to provide you with further information on transport insurance.