The types of cargo transportation insurance

The types of cargo transportation insurance

In Russia, the concept of cargo insurance was formed in the middle of 19th century. Nowadays, cargo insurance is still popular and in high demand.

Modern insurance system in Russia is mainly guided by the international insurance system. Based on the insurance policy, types of cargo insurance are the followings:

• ✓ Delivery method.
• ✓ Cargo characteristics.

Insurance guarantees that the possible losses that may happen during the transportation of the goods will be compensated. It means that insurance is very beneficial in terms of protecting the material interests of the carrier.

There are three main types of insurance:

• ✓ A - this type of insurance assumes responsibility for all existing risks.
• ✓ B - Insurance for particular average.
• ✓ C - Insurance that is not responsible for any possible damages, except disasters.

Risks in cargo insurance

The main priority of the contracting parties is considering the possible risks. In the practice of insurance companies there are 2 general principles, which provide insurance protection.

• The first one offers insurance for almost all types of risks, except:
• ✓ Military actions or incidents
• ✓ Nuclear explosion, radiation
• ✓ Negligence of carriers
• ✓ The impact of negative temperature on some goods
• ✓ Violation of the terms of transportation
• ✓ Fire or explosion (insurance is only paid when the fire is caused by the presence of explosive elements)
• ✓ The second principle is very specific: the customer can only be insured against certain risks, for example:
• • ✓ Various natural disasters (storm, electric spark, etc.)
• ✓ If the vehicle transporting the cargo is missing
• ✓ If an accident /casualty/ occurred during shipment
• ✓ Global disaster

Types of contract packages for international cargo insurance

International cargo transportation is associated with significant risks. On its way, the cargo crosses at least one state border. Items may be lost due to misunderstanding between two parties. In case of international cargo insurance, the following model is used: each country guarantees the legal protection of the good in its territory. When the cargo crosses the border, the subject of insurance is changed.

There are two types of contracts for international cargo insurance:

1. 1. A certain transportation of goods: The duration of this contract is limited.
2. 2. For a specific period of time: The contract is signed based on the terms of the general insurance policy. This agreement is valid if the goods are transported on a permanent basis.