Cargo insurance provides coverage for:
- Damage or destruction of your property (products, goods, equipment, etc.), while in transit (by air, land or sea)
- Liability exposure for damage or destruction of someone else’s property under your care, custody, or control – bailee customers goods.
Shipping insurance, transportation insurance, transit insurance, freight insurance, moving insurance, and cargo insurance—all of these monikers describe essentially the same type of insurance coverage for equipment, products, or goods that are moved from one location to another.
Equipment Coverage: Another example of coverage is for equipment or property that may be involved while in transit. For example, should your truck driver crash into a power pole, a cargo insurance policy will cover the equipment in transit.
Legal Coverage: Finally, a cargo policy also covers costs that may arise because of a loss or damage to goods, products, or equipment that are insured while in your care custody, or control.
Am I not covered by general property and liability insurance?
Yes and no. Your general property and liability insurance provides you and your business assets with protection while your products, goods or equipment are on your business premises. Many polices also provide limited coverage for property in transit, however these policies are not designed to protect your assets on a larger scale (high values or frequent shipping). What this essentially means is that the moment your property leaves your business premises, it may no longer be insured.
Therefore, if your business is a commercial or industrial operation, such as servicing, processing, manufacturing, distributing and wholesaling, or importing and exporting—and your are responsible for property while it is in transit—cargo or transit insurance is critical to properly protecting your company’s exposures.
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