What is Shipping Insurance in World Trade?
Securing your money and goods in export is one of the most important stages. Insurance is essential in this process where you spend your time and effort. Shipping insurance is a life saver for buyers and sellers. Many problems can arise when goods travel from point A to point B. You can minimize or eliminate the damage these problems will cause you. This is exactly why shipping insurance exists. In this article, we shared the details you need to know about shipping insurance.
There are certain standards in international trade, such as Incoterms. But sometimes having standards and following them is not enough. Extra precautions such as insurance are necessary.
Shipping insurance secures the goods in shipment. It is a protective measure. Shipping insurance protects goods against many problems. These issues can be theft, damage, improper use, and more. Shipping insurance is financially responsible for the goods until they reach the designated point. In particular, there are many problems that an exporter may encounter during the shipping process.
Although successful companies have very little margin of error, err is human. Or, sometimes unforeseen circumstances can jeopardize shipping.
Delivery is a stage where many problems can arise. Having a safety net against dangers is especially important for exporters. Exporters may have to pay shipping charges for goods that are not delivered correctly. In this case, they may lose their money. However, shipping insurance gives a guarantee to the exporter.
Shipping insurance is a policy. With this policy, shippers can receive reimbursement for lost, stolen, or damaged goods. Insurance is active throughout the shipping process. You can get insurance through couriers or third-party vendors. Insurance costs may vary depending on the declared value of the goods.
When to Buy Shipping Insurance?
In fact, insurance is necessary for the export of all kinds of goods. However, insurance is a must for some items. It is a wise solution to have insurance for the following types of delivery.
Designer Labels and Luxury Items
Items with a high market value are more susceptible to theft. Design products and luxury items are thus in danger of theft. Securing these items with insurance will provide you with peace of mind during shipping. Moreover, you will be financially secure in case of possible theft.
International Deliveries
There are many modes of transport for international deliveries. Because the goods are traveling to a distant place. Therefore, when goods pass through more than one mode of transport, they become vulnerable to hazards and damage.
Electronic Items
Today, many consumers order electronics from other countries thanks to the advantages of e-commerce. Electronic items can be damaged quickly due to their nature. Besides, electronic products have a high value. For this reason, shipping damage to these products can cost you dearly.
Artworks and Fragile Items
Works of art are items of high intellectual and financial value. Fragile products are also items with high value but are open to damage. If such items are damaged during shipping, the costs will increase greatly.
Active Shopping Season Products
Shopping peaks at some times of the year. Shopping activity increases exponentially during periods such as Black Friday and Christmas. During such periods, there may be too many goods in transit. The greater the amount of cargo, the greater the risk of damage to the goods.
Coverage of Shipping Insurance
Coverage of shipping insurance differs depending on the policy and company chosen. However, there are situations that most shipping insurances cover jointly. Delivery delays and property damage are issues covered by almost every insurance. Also, most insurances cover events beyond the seller’s control, such as shipping errors that occur before delivery. You need to be careful before choosing, as the coverage will vary according to companies and policies. It is best to choose a policy that fits your criteria.
Benefits of Shipping Insurance
Shipping insurance has many benefits. However, we can list the key benefits.
The Opportunity to Trade with Comfort
Worrying about the goods in your busy business life will exhaust you. However, you can secure yourself financially with shipping insurance. Thus, you get rid of a stress factor in your business life.
Avoiding Replacement Costs
If the goods are damaged during shipping, you will have to cover the damage. However, shipping insurance protects you financially against such damages. Thus, the fees required for replacement will not be a burden on your shoulders.
Easy Process
Paperwork intimidates some. But we have good news for you. Getting shipping insurance is very easy. The ease of the process is actually a factor that makes insurance even more advantageous.
How Does Shipping Insurance Work?
In shipping insurance, the process works as in many types of insurance. Businesses file a claim for financial loss when an insured shipment is harmed or lost. Business requests can be made online, by fax, or by mail. They must do the transactions within a specified time frame. In most cases, filing occurs immediately after businesses file damaged shipment claims. However, lost shipments may take longer than a day to accommodate delivery delays. Even for such requests, the process usually ends within a few months from the shipping date.
Some documents and evidence speed up the claim process. These include a certificate of insurance, shipping label, and photos and documents proving damage. Compensation processing time may vary by the insurance provider.
The Risks of Not Having Shipping Insurance
Uninsured shipping leaves the business unprotected if anything happens to the shipments in transit. In this case, businesses have to make extra expenses. Often, carriers provide a guarantee. However, the scope of this guarantee is not wide. The assurance given by the carrier will not be sufficient to cover the costs of the damaged or lost goods.
When shipments are damaged or lost, the seller must reship. In some cases, he even needs to speed up shipping. Moreover, it may be necessary to offer a discount to the buyer due to problems during transportation. Without shipping insurance, this whole process would be costly.
Have Questions About Shipping?
Turkish Goods will answer all your questions about shipping with its professionalism and competence in the field. You can contact us by clicking here.
