Facts about Cargo Insurance
- Some Ocean Cargo policies exclude coverage for damage caused by heating, freezing, change in temperature or spoilage.
- Many Ocean Cargo policies exclude coverage when poor packing or pack-aging causes a loss.
- Government officials cause damage to goods in transit during routine customs, drugs or security inspections. Most cargo policies only cover damage by specific U.S. Federal Agencies, such as U.S. Customs Agents, but may not cover damage caused by the D.E.A., U.S. Homeland Security Agency or foreign officials.
- The expense to remove and dispose of property after an accident is more costly when property is blocking roads or highways, and may not be covered or is limited under many cargo policies.
- Most cargo policies do not cover the reusable packaging materials used to protect and secure the shipment.
- A truckers responsibility for cargo is usually limited to what is stated on a written contract, bill of lading or shipping receipt.
- Perishable cargo may spoil as a result of mechanical breakdown to a refrigeration unit on the truck on in a warehouse terminal or temporary storage facility. Many policies don't cover this, or provide only very limited coverage.
- If the truck breaks down or is in an accident, the cargo may not be damaged, but many policies do not pay for the expenses to recover and protect the cargo that was being hauled, since the cargo was not damaged.
- Most all cargo policies do not cover damage caused by normal wear and tear, willful misconduct or fraud by any party to the contract, delays in transit, loss of market and nuclear contamination.
- When goods are shipped FOB, the seller's responsibility ends when a carrier takes possession of them, or, with respect to ocean shipments, when the merchandise is placed safely aboard the vessel or when an on-board bill of lading has been issued. The buyer is responsible for insuring the goods from that point on.
- In order to save a ship in danger of sinking during a storm, some of the cargo may have to be thrown overboard. The ship owner and the owners of the saved cargo obviously benefit at the expense of the owners of the jettisoned cargo. This was considered unfair and the principal of General Aver-age evolved so that all parties would contribute in such a situation. Thus if a firm ships cargo on a vessel that is involved in a loss, the firm may face a claim against it even though their goods are undamaged. The ocean cargo policy may not cover such claims.
