5 Reasons Why You Need Cargo Insurance

Why You Need Cargo Insurance

Carrying cargo is always associated with many risks. Different types of cargos are shipped together and you can’t actually give the complete guarantee about the safety. Cargo insurance can help you to recover any financial loss and also to get the business reputation.

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For any shipping business, maintaining the service quality with safety is quite difficult. There are very few companies are maintaining the international standard. FBA Freight Forwarder is one of the major shipping companies which is committed to safe and fast shipment.

However, let’s learn why you need cargo insurance for your business.

Recovering Any Damage

Damaging the cargo is a common issue. In most of the cases, this happens while loading or unloading. There are many other reasons for cargo damage. Low-quality packaging, wrong container, poor ventilation, wrong temperature setting, overloading, wrong container stacking, poor monitoring etc. are common causes of damaging the cargo.

In many cases, for some sensitive products, it is mandatory to have an insurance policy. However, most of the damages are covered by the sender.

Lost Cargo

Cargo missing is another great obstacle for anyone related to this business. The shipping company may have to bear the expense for missing cargo as it is their responsibility. If there is an insurance policy, the company may survive from a big loss. However, there are very few insurance companies offering policies for missing cargo as it is risky, associated with misunderstanding and quite critical to solving the case.

Natural Disasters

Though it belongs to damaged cargo still we made a new point for this to make it clearer. Natural disasters like storm, flood or hail rain can damage the cargo and the carrier may be eligible for the safety. In that case, to cover the loss, the insurance policy may work. No one can guarantee about the natural disaster and it mostly applicable for the shipment by sea.

Contractual Requirement

There are many customers who want to mention about the insurance policy while signing the contract. So, if the policy overlooked, the shipping company may have to bear the loss in case of an accident. It is good to read the contract carefully before carrying any cargo of another company or individual.

Fire Protection

Fire is always a scare for any shipment company especially if they are shipping any cargo via ship or airplane. Fire mostly occurs in the ship in the middle of the sea where very limited safety features are available. Only the fire protection of the ship is responsible to handle the bad situation and many times it fails. In this case, the insurance policy may pay the cost of the damages. It is associated with huge financial loss.


Last of all, having cargo insurance always keeps you on the safe side. For a perfect business management, it is always recommended to have a policy covering all the costs associated with shipment business. Moreover, this gives financial security to the customer which is important for expanding the business quickly.

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