Discover how you can keep customers satisfied, reduce your business risks and stand out in the competitive logistics market by offering cargo insurance.
With thousands of freight forwarders and logistics providers in Asia Pacific, it is a real challenge to stand out from the competition.
These days, shippers have numerous options at their disposal to move their freight around the world.
So how can you differentiate yourself from other transport operators? What should you do to attract new customers and keep existing customers satisfied with your services? Do you provide value-added services like cargo insurance? Do you incorporate cargo insurance as part of your process to reduce your business risks?
Freight liability vs Cargo Insurance
Let’s start by clearing up a common misconception – the difference between freight liability and cargo insurance:
If there is no cargo insurance in place, the shipment of your customer is subject to your standard trading conditions, where limitations of liability and exclusions apply. In the case of a loss to the goods under your responsibility, the compensation will be determined by the trading conditions. Hence, your customer may not receive full settlement, due to limitations (e.g. per kilogram or package) or even worse, the claim might be rejected due to exclusions (e.g. act of God or war). In addition, your customer needs to provide evidence that you are legally liable for the loss that occurred.
With cargo insurance in place, your customer will be compensated according to the policy of insurance. In case of physical loss or damage to the goods while in transit, your customer will be reimbursed up to the full value of the goods. Also, your customer does not have to prove that you are legally liable for the loss.
Example of a total loss claim scenario
A freight forwarder was hired to arrange for a shipment of machinery valued at USD 50,000.
The shipment was received and upon further inspection, the machinery was found to be damaged. The shipper filed a claim against the freight forwarder.
|Without cargo insurance||With cargo insurance|
|Compensation limitation||Subject to the standard trading conditions, where limitations of liability and exclusions apply||Compensation is as per the policy of insurance.|
||Full settlement of USD 50,000|
The benefits of cargo insurance
As explained above, offering cargo insurance is a real benefit for your customers as their cargo is fully protected from loss or damage during the freight movement process if an unexpected event happens.
Cargo insurance is vital for the following reasons:
-it is a difficult process to make claims against any air, road, rail or sea carriers
-there is a major hidden cost associated with the handling of cargo claims
-it removes conflicts with shippers when cargo is lost or damaged
-it removes uncertainties for shippers
-it creates goodwill with shippers
Seamless cargo policy issuance
Today, you can have access to innovative cargo insurance platforms specifically designed for the transportation industry. As a transport operator, you need cutting-edge and efficient systems to respond to customers with speed and personalised services, especially in the event of cargo claims.
Marine cargo insurance web-based platforms allow you to:
-obtain instant quotes for one-off shipments
-convert the insurance cover purchase in real-time avoiding delays and manual work
-protect your business from litigation for loss or damage to cargo
-improve customer retention by offering a value-added service to your customers
Having a fast and effective system for quoting cargo insurance is a key differentiator for your business.