Blogs

KEEP IN TOUCH

Know The Benefits of Insuring Your Export Goods

During transportation from the port of dispatch to the point of destination, goods may get damaged, causing the exporter financial loss. To protect himself, the exporter may purchase an insurance policy to cover physical damage to the goods. It is important to know that the term Marine Insurance is used for goods shipped by sea. Cargo Insurance is used when goods are shipped by air. However, both terms are interchangeable, as both define the same thing. To know more about it join our import export training course. Two main reasons for insurance are legal and commercial. The legal liability of the intermediaries is limited. Clearing and forwarding agents, carriers, port authorities and customs authorities are examples of intermediaries who handle goods at various stages. Damages caused by circumstances beyond their control or losses caused despite as a result of reasonable care taken by them are not covered by their liability policy. A sea shipment is subject to a limit of 100 pounds per package at present and a shipment by air is subject to a limit of $16 per kilogram at present, which is modified from time to time. An amount of compensation of this kind does not cover the total loss sustained by the exporter. The banks also insist on coverage of insurance when they make post-shipment financing. Insurance is required even for commercial reasons. When goods are damaged, importers may refuse to accept the bill of exchange, in case of D/A bills. When loss occurs, it may not only affect the shipment of goods, but also profit. Did you enjoy our article? Do share your experience in the comment section. The information provided above is part of our Online Export Import Training course.