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The importance of shipping insurances

The importance of shipping insurances

It is not particularly dangerous for your goods to be shipped from point A to point B, but you can never tell what will happen during shipping: theft, damages, etc. You should make sure that your goods are protected by shipping insurance which will cover most situations.

Your sales contract determines whether you must take out shipping insurance

In the shipping world, there are what we call Incoterms. The international chamber of commerce created these terms in order to standardize the obligations and responsibilities of sellers and buyers when shipping. These terms are used in the contracts signed for the sale or purchasing of goods.

Incoterms also determine if it is up to the purchaser or to the seller to take out shipping insurance.

It is therefore strongly recommended to carefully choose the Incoterms you use in your contracts.

Shipping insurance to protect your goods

What risks your goods are exposed to

During shipping and handling operations, your goods may be damaged (road accident, poor fastening or handling) or stolen. In order to limit such risks we recommend careful preparation of your goods.

Liability of the shipper in terms of shipping insurance

The shipper is responsible for the goods that have been handed over to him, but his liability is limited in case of accident.

Terrestrial, maritime and air shipping agreements also limit shipping company’s liability according to pre-established international agreements.

In the event of an accident, the payment to be made by the shipping company is calculated according to the weight/volume of your goods or to the weight and not to the value of the goods. These damages are also limited by a limitation of refunding. Moreover, it should be specified that certain factors exonerate the shipping companies of any liability (force majeure, strikes, etc.). Therefore, it is important to take out shipping insurance in order to limit your potential losses.

In most cases, the contract signed with your shipping company will implicitly imply approval of these shipping conditions in which the limits of liability and payment in case of damages are stipulated. Take a look at the conditions before handing over your goods to a shipping company. Reading this document will enable you to cover the shipping of your goods with the most appropriate insurance.

Courier shipping insurance

Goods sent by courier (Canadian postal service, Purolator, etc.) are generally covered up to 100$. If the value of your packages exceeds this amount, you should indicate the amount that you want them to be covered by and pay extra insurance.

Taking out insurance with the shipping company or with a specialized company

If you have small shipping volumes, you can ask the shipping company who you are working with to insure the goods on your behalf. There again, you will have to indicate the amount and pay the cost of this insurance.

If you have a lot of goods to ship, an insurance company can propose shipping insurance adapted to your activity.

Close monitoring of your deliveries to get the best out of your shipping insurance

In the event of damages, you must imperatively provide the insurers and the shipping company with all the corresponding documentation, which goes to show the importance of carefully filling out the shipping documents with real information and making sure they have been completed by all parties.

Make your customers aware of the fact that they must indicate « reservations » when the goods are damaged on delivery. These reservations are notes that the recipient indicates on the delivery document in order to indicate any problems. The “reservations” must be communicated within a certain timeframe (for example: within 3 days), because you will also have a limited time to communicate them to your shipping company or to your insurer to benefit from shipping insurance.

Do you need more information about shipping insurance? Do not hesitate to contact your shipping company!