Insurance for international cargo transportation is something that almost every single export business has to do, but it is not simple to make it both secure and economical. Since the actual operation of the situation is very different, so how to use insurance flexibly to avoid the risks in the export cargo transportation is a professional work of great skill.
Five elements of insurance selection
When taking out insurance, you always want to find a balance between insurance coverage and insurance premium. To do this, you must first assess the risks you face, identify which risks are the biggest and most likely to occur, and weigh them against the insurance rates of different types of insurance.
More insurance will of course feel much safer, but the premium expenses will certainly increase. Guangdong Province, Property Insurance Company Cargo Insurance Division, Chief Gao Shuhua, handling international cargo insurance for many years, he believes that exporters insured, usually the following factors should be considered: 1. the type, nature and characteristics of goods; 2. the packaging of goods; 3. the transport of goods (including mode of transport, means of transport, transport routes); 4. The political situation at the destination, such as during the NATO air raid on the FRY in 1998 and the coup in Pakistan in 1999, if you take out war risk insurance, the exporter will not have to be alarmed by the safety of the goods.
When to use All Risks Insurance?
"All Risks" is one of the most common types of insurance. Most of the letters of credit opened by buyers also require the exporter to take out all risks insurance. All Risks Insurance is the most convenient because its liability coverage includes peace of mind, water damage and 11 general riders, so the insured does not have to think about what riders to choose. However, often the most convenient service comes with the biggest price tag. Mr. Guo Yuqiang is a salesman of PICC Shenzhen and has been engaged in cargo insurance business for 6 years. He said that as far as insurance rates are concerned, the rate of water damage insurance is about 1/2 of all risks, and the rate of peace of mind insurance is about 1/3 of all risks.
Some goods insured with all-risk insurance as the main insurance may not be enough, but also need to take out special additional insurance. Certain foods containing aflatoxin, such as peanuts, rapeseed, rice and other foods, often contain this toxin and will be refused import, confiscated or forced to change use due to exceeding the importing country's restrictive standards for the toxin, resulting in losses, then, when exporting such goods, aflatoxin insurance should be covered as a special additional insurance.
Flexible use of primary and supplementary insurance
The target market is different, the rates are different, the exporter in accounting for the cost of insurance, you can not "one size fits all". If you take out all risks insurance, the rate may be 0.5% in developed countries in Europe and America, 1.5% in Asian countries, and up to 3.5% in African countries. In addition, Mr. Guo suggested that cargo owners in the choice of insurance, according to the market situation to choose additional insurance, such as to the Philippines, Indonesia, India's cargo, because the local terminal situation is chaotic, the risk is relatively large, you should choose theft of the lift is not insurance and short amount of insurance as additional insurance, or simply insure all risks.
Risk prevention is more important than insurance
Insurance is a tool to transfer and spread the risk. Although the risk of loss caused by the insurance company will be responsible for claims, but the cargo owners in the process of claiming time and effort, but also is not a small price, so the awareness of risk prevention and do some preventive measures on the basis of insurance is very necessary. Mr. Guo summed up his handling of the claim case reminded that "the container is broken and leaky, resulting in more and more cases of damage to the goods." To prevent this risk, one is to try to choose a strong, good reputation of the shipping company, their hardware and equipment will be relatively good; second is to carefully check the empty container before loading, to see if there is broken leakage, the cabinet door seal is intact. Also check whether there is an odor and presume what goods were loaded in the previous section. If the goods you want to load now is food or medicine, and previously loaded with strong-smelling goods or even dangerous chemicals, it may lead to crosstalk, or even make the goods simply can no longer be used.