Imagine the following situation.
Your company has found an excellent supplier to import a differentiated product.
After this stage, he organised the entire import process, the container shipped normally and arrived at its destination without any damage.
However, without your knowing, during the voyage, the ship's captain had to throw overboard some containers to ensure the safety of the ship and all the crew.
And because you don't have any insurance, in order to retrieve your cargo, a deposit is required for the apportionment of losses. What's more, this unexpected value is greater than the value of your goods.
If you find this situation absurd, it is because you do not know the concept of Gross Damage - the greatest danger for those who ship goods without contracting International Cargo Insurance.
Gross Damage is understood to be that which is voluntarily declared by the captain of the ship with the purpose of avoiding the greater evil, provided that the danger was not caused by the captain himself, his crew or equivalent.
If the master assesses that it is necessary, as in the example above, to throw overboard some containers to ensure the safety of the ship and crew, and even if his goods arrive normally, the costs of the dispensed goods are apportioned among all the shippers on the ship.
If you have International Cargo Insurance, you normally call the insurer.
Those who do not have one need to make a deposit to the shipowner in order to be able to withdraw the goods.
As you could see, just the explanation of the danger of a Gross Damage in the transport of those who have not contracted an International Cargo Insurance is already quite valid.
However, that's not all.
When you contract an International Cargo Insurance, you will have all the necessary security for the transportation of goods. In other words, you will have coverage for eventual losses caused by accidents, damage and loss, including in the case of Gross Damage.
It is important to emphasise that the contracting of international insurance is made in accordance with the Incoterms (International Commercial Terms).
They guarantee the rights and regulate the obligations and responsibilities of importers and exporters.
Another important piece of information in this process is the mode of transport, that is, whether it will be by sea, air or land.
What defines the coverage is always the policy. And there is no single policy.
Different shippers on the same vessel may have the same merchandise, leaving from the same origin to the same destination, but not necessarily the policies will be identical.
Each shipper may have chosen different coverage and negotiations.
Who can be of 3 models:
With this contract, your cargo will be protected against any damage caused by external factors - all those present in categories B and C. This insurance also covers:
- damage and costs of recovery of the cargo;
- expenses incurred by the insured in transporting the cargo to the correct place of delivery, when there is an error along the way;
- reimbursement of necessary unloading and storage costs.
In this contract, your cargo will be covered against:
- all the circumstances mentioned in the Basic Cover (C);
- water entering the vehicle, vessel, storage place and container;
- earthquake and volcanic eruption;
- flooding and overflowing during overland travel;
- falling objects on the vehicle and collapses during overland travel.
Already that contract covers:
- fire, lightning and explosion;
- overturning, tipping over, collision and derailment (land vehicles);
- cargo discharged into the sea;
- total loss caused by sea sweeping;
- total loss during loading and unloading operations at sea;
- collision of the vessel with external objects;
- stranding or sinking of the vessel.
Besides these, in all cases additional cover may be contracted, such as: Wars and Strikes; Undeclared Air Shipment; Additional Transshipment; Additional Ship Classification, among several others.
After analysing the causes, the Suez Canal Authorities (SCA) concluded that the ship's captain was largely to blame.
"The captain's repeated orders in a short space of time caused the vessel to cross the canal and run aground. The data from the ship's black box proves that the error was not of the Canal masterminds," said Captain al-Sayed Shuaisha, head of the investigation team.(Portal R7).
What about insurance?
With the International Freight Insurance contract, whether with Basic Wide Cover (A), Basic Restricted Cover (B) or Basic Restricted Cover (C), similar cases are covered.
On 25 May 2021, an explosion hit the container ship MV X-Press Pearl, anchored near Colombo, Sri Lanka's largest city and financial centre. The ship was carrying 1,486 containers. With the impact and force of the flames, several containers ended up falling into the water.(Fazcomex)
What about insurance?
Whether with Extended Basic Cover (A), Restricted Basic Cover (B) or Restricted Basic Cover (C), the shipper will be covered in similar cases.
Where to hire?
The ideal is to always choose to contract insurance from a company in Brazil - with this you will have quicker and more effective access in case you need to ask questions and solve bureaucratic issues.
Choose a good insurance advisor:
In addition to helping you with Incoterms issues to arrive at the best value and the best contract, it is the insurance consultant who assists your entire case in a claim situation.
So, choose a good insurance advisor so that you get a complete assistance.
Be very attentive to the coverages of your policy and evaluate well the need to contract a Wide Basic Cover (A), a Restricted Basic Cover (B) or a Restricted Basic Cover (C).
Deadline for Hiring:
It is advisable to have your International Cargo Insurance contract closed at least 24 hours before embarking your goods.