Optimism drives business growth, but preparation safeguards it. With nearly 30% of transit losses being unavoidable, cargo insurance becomes essential rather than optional. Accidents, theft, and unforeseen events can strike anytime during shipment, threatening your goods and bottom line.
Cargo insurance protects goods during land, sea, or air transportation. It ensures you don't face financial setbacks if shipments are damaged, stolen, or lost. While you may trust carriers with your goods, it's a myth that they'll fully cover losses. Their liability is often limited, leaving businesses vulnerable. In fact, understanding terms and conditions after a mishap can be confusing, costly, and time-consuming.
This is where cargo insurance policy steps in. It protects importers and exporters against losses from theft, damage, or unforeseen incidents during transit. Learn about cargo insurance in this blog to keep your bottom line safe and your business running smoothly!
6 Types of Cargo Insurance Coverages
Cargo insurance covers various shipping needs and risk profiles. Here's a detailed look at the most common types:
1. All risks coverage
This is the most comprehensive form of cargo insurance. It covers a wide range of potential losses or damages during transit, except for exclusions specified in the policy. This type is ideal for businesses seeking extensive protection against unexpected events, such as weather disruptions, mishandling, or accidents.
2. Named perils coverage
Named perils coverage protects against specific risks mentioned in the policy, such as fire, theft, collision, or natural disasters. While it is generally more affordable than all risk coverage, it offers narrower protection. Businesses often choose this option to safeguard against common, high-probability risks without incurring the cost of comprehensive coverage.
3. Open cover
Open cover insurance provides continuous protection over a specified period, making it suitable for businesses that ship goods regularly. Instead of insuring individual shipments, companies can opt for ongoing coverage, saving time and reducing administrative tasks.
4. Specific (Voyage) policy
Designed for one-time shipments, this policy covers cargo for a single journey from the point of origin to the destination. It is cost-effective for businesses that do not frequently ship goods but want assurance for a particular consignment.
5. Contingency insurance
This type of insurance is valuable when buyers refuse responsibility for damaged goods. Sellers can use contingency insurance to cover potential losses in cases where the buyer's liability is unclear or disputed, ensuring they are not financially exposed.
6. Warehouse-to-warehouse coverage
This policy covers the cargo from the seller's premises to the buyer's location, including all transit stages. It ensures that goods remain protected during handling, storage, and transportation until they reach their final destination.
Why Do Shippers Need Cargo Insurance?
In 2024 alone, cargo theft incidents in the United States and Canada surged by 27%, reaching 3,625 reported cases, up from 2,852 in 2023. The estimated loss value skyrocketed to $454.9 million in 2024 from $331.9 million the previous year, highlighting the growing threat to supply chains. Notably, the average value per theft rose to $202,364, emphasizing the financial risks businesses face without adequate coverage.
Each quarter in 2024 broke previous records, with Q1 experiencing a dramatic 46% increase in incidents compared to Q1 2023. While the spike narrowed by Q4, there was still a 12% year-over-year increase, underscoring the persistent danger of cargo theft throughout the year. The cost of insurance is a fraction of the potential loss—and when things go wrong, that small investment can save your business from substantial financial setbacks.
Here are some reasons why you should consider opting for cargo insurance:
Shield Your Business from Costly Losses
Transporting goods involves unpredictable risks—accidents, theft, or weather-related damages. A single lost or damaged load can cause major financial strain without Silq’s cargo value protection. Insurance ensures that unexpected losses don't derail your cash flow or profitability.
Meet Global Compliance Standards
Many countries require proof of cargo insurance before accepting imported goods in international trade. Failure to comply with these regulations can lead to shipment delays, penalties, or rejection at ports.
Enhance Customer Trust
When customers know their orders are insured, it builds confidence in your brand. Delivering goods safely and managing risks responsibly strengthens long-term client relationships and enhances your reputation in competitive markets.
Facilitate Better Financial Planning
With Silq’s cargo protection, you can budget confidently, knowing unexpected losses won't derail your finances. This stability allows you to allocate resources to other growth initiatives without fearing unforeseen expenses.
Why Choose Silq for Your Cargo Value Protection?
Whether shipping domestically or internationally, risks like collisions, piracy, and natural disasters are real. With Silq, you don't just protect your goods—you secure your business continuity and financial health.
Efficient Claims Process with Quick Settlements
Time is money—especially when dealing with damaged or lost shipments. Silq prioritizes streamlined claims processes, ensuring fast, hassle-free settlements. This helps you recover losses quickly and keep your business operations on track.
Damage Risk Mitigation
Freight damage is often unavoidable, whether from rough handling, accidents, or shifting loads. Cargo insurance protects against these common risks, saving you from costly replacements or repairs.
Competitive Premiums
Benefit from affordable rates without compromising on coverage or service quality. Silq’s flexible plans cater to various budgets while delivering maximum value and comprehensive protection.
Dedicated Support
Silq’s experts guide you through policy selection, claims, and risk management every step of the way. Our team is always available to answer questions, ensuring you make informed decisions with ease.
Tailored Protection for Diverse Cargo Types
Not all cargo is the same. Perishable goods, hazardous materials, or high-value items need specialized coverage. Customize the plan to suit the nature of your products, ensuring comprehensive protection.
Read More: Key Strategies To Ensure Cargo Safety During Logistics Operations
Don't Buy Cargo Insurance Blindly—Here's What to Look For
Buying Silq’s cargo insurance is not just about ticking a box—it's about ensuring your shipments and business are fully protected. Here are key factors to consider before purchasing a policy:
1. Who's Buying the Coverage?
If your supplier offers to arrange the insurance, don't just assume you're covered. Ask:
- What specific losses are covered?
- What are the policy limits?
- Which company is underwriting the policy, and is it reputable?
- Where will claims be processed—your country or the origin of the shipment?
Understanding these details ensures you're not caught off guard during a claim.
2. Policy Exclusions and Limits
Not all risks are covered. Carefully review:
- Excluded perils (like certain natural disasters or acts of war)
- Limits on high-value goods or specialized cargo
- Failing to understand exclusions can lead to denied claims when you need coverage most.
3. Coverage Scope: Domestic vs. International
Does your policy cover shipments across borders? International shipping involves risks such as customs delays, geopolitical issues, and varying legal standards. Make sure your shipment insurance covers the entire journey from warehouse to delivery.
4. Claim & Settlement Process
When things go wrong, fast claims processing matters. Check:
- How quickly are claims settled?
- What documentation is required?
- Is local support available?
- Delays can tie up your cash flow and disrupt operations.
5. Carrier Liability vs. Cargo Insurance
Relying on carrier liability is risky. Many assume that carriers cover all losses, but they are not obligated to compensate for incidents beyond their control, such as natural disasters or accidents. Carriers are only responsible under limited circumstances and for a fraction of your shipment's value. Silq’s cargo insurance for shipping goods fills this liability gap, ensuring you're not left bearing the full cost.
6. Reputability of the Insurer
Choose a reputable insurer known for:
- Fair claim handling
- Reliable customer service
- Strong financial backing
7. Additional Coverages
Look for add-ons like:
- Warehouse cargo cover insurance (for goods stored before shipment)
- Rejection insurance (if your goods don't meet import standards)
- Delay coverage (to offset financial impacts of late deliveries)
Secure Your Shipments With Silq
Silq offers a cargo value protection service designed to protect your shipments from unforeseen events during transit. Understanding that carriers often have limited liability, Silq provides solutions to cover potential losses or damages, ensuring your business remains financially secure.
With competitive premiums and a fast claims process, Silq's dedicated support team guides you through every step, offering expert advice and seamless service. Whether you're shipping by land, sea, or air, the plan adapts to your specific needs, providing peace of mind and safeguarding your investments.
