International cargo insurance

As with other types of insurance (real estate, life, automobiles, machinery), international cargo insurance has as its main objective the protection of a good, in this case the one which will be exported or imported, granting peace of mind to the parties involved in the operation regarding any damage that may occur during the transport of the goods from one country to another.

Insurance is not mandatory in Foreign Trade operations, but highly recommended by any experienced professional in the sector, especially considering that in this transit (whether by sea, air, road or rail) many things can happen, and the cargo can be totally either lost or damaged. International cargo insurance is extremely important, therefore, for cases of:

  • Robberies and thefts.
  • Damage that the cargo can suffer while it is stored in the port.
  • Maritime piracy.
  • Accident with containers.
  • Damage during handling.

Depending on the INCOTERM previously negotiated between the importer and the exporter, the responsibility for contracting insurance will be this or that one.

It is important to note, however, that some setbacks are not under the insurer’s responsibility and exempt it from compensating the contracting party in situations such as:

  • War cases.
  • Bad faith conduct by the importer in order to obtain gains from giving false information about the state of the cargo.
  • Default of the contracting party.

When the goods to be exported are of Brazilian origin, the contract must be closed with a national insurance company, but if the destination is Brazil, the Brazilian importer can opt for an insurance company from another country, if he is responsible for contracting and paying the policy.

How much does it cost to contract the insurance and how to get a good cost-benefit?

Searching for different suppliers of a particular product or service is always the best way to get good offers and quotations, the same works for hiring an international cargo insurance. It is important for the exporter or importer to do deep research and assess which insurance company makes the most sense for its operation and meets the specifics of the operation.

A complete insurance proposal must basically contain:

  • The value of the prize.
  • Deductible on the policy.
  • Term of coverage.
  • Maximum warranty limit.
  • List of items that are not insured.
  • Risks that the insurer will cover.

For such it is essential that the contracting party provides as much detail as possible so that there is no misunderstood information, thus avoiding many problems. That’s why it is the contracting party’s responsibility to make certain information such as:

  • Start and end of the insurance coverage location.
  • Value of items to be insured.
  • Dimensions of the cargo.
  • Frequency of operation (since it is possible to contract insurance for reiterated operations that happens in a specific period).

However, always pay attention to every step of the process and always choose reliable suppliers so that your operation is carried out successfully!

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