Cargo Liability Insurance

Cargo liability insurance is a type of inland and marine insurance designed to protect goods currently in transit, usually via a semitrailer, delivery vehicle or boat. Both types of cargo insurance, marine and inland, will be discussed below.

Generally, cargo liability insurance is purchased by transit companies or individual contractors protection against liability resulting from the loss, damage of the goods in transport, as well as legal issues that arise from their loss or damage. Most frequently, cargo insurance extends from the time the cargo leaves on the semitrailer to the time it is unloaded by the insured party. During this travel time, both the goods in the shipment, and the person operating the vehicle or marine vessel are protected from liability.

Once the shipment reaches its destination and is documented to be undamaged and without any loss, all liability ceases immediately, and the insurance is no longer in effect. At this point, liability may rest on the party who accepted delivery, or if they also have general liability insurance, by the general liability insurance company.

Motor Truck Cargo Liability Insurance

United States Federal Law requires that the delivery or transport of goods by land requires cargo liability insurance of $5,000 for loss or damage to the contents of each vehicle and $10,000 for total loss or damage during any incident. $6,000 worth of product that spills into the street and is subsequently ruined would be covered up to $5,000, while the damage that results from the spill would be covered up to $5,000 with minimum insurance levels. The driver or company responsible would then be liable for the $1,000 over and beyond insurance maximums.

Very frequently, companies and individual contractors carry insurance that exceeds the minimum requirements because of the potential for damages, and the typical process for reaching a decision in the matter. Unlike ordinary car accidents which are solved by a police officer, liability concerns extend into the courtroom, where a party expecting a delivery that is damaged may sue not only for the loss of the product, but also the delay and lost income. The suit also brings about legal defense fees, which are covered by a liability policy.

Marine Cargo Liability Insurance
Marine cargo liability insurance protects delivery vessels and their operators against damages, delays, and costs associated with the loss, damage, or theft of product on open water.

With international trade and sea-based delivery becoming a more popular choice for the movement of physical goods, marine cargo insurance is surging in popularity. Also, since delivery by sea is more prone to delays due to weather or other incidents than land based travel, marine transit companies require consistent protection from all types of liability. Another important consideration is that unlike concrete (for land travel), most any product is damaged by water contact.

Marine cargo liability insurance policies can be written to include transit by land and by sea, and vice verse. For companies operating on the ground and on water, these policies help reduce costs by packaging two different policies into one and aids in avoiding the possibility of coverage gaps.

Annual Transit Insurance
Annual transit policies are those purchased for an entire year, protecting against all liabilities incurred during transit for the period. Often, annual maximum mileage is incorporated in order to protect the insurance company from excessive use, though few maximums are triggered with proper planning.

Single Transit Insurance
Single transit insurance is purchased only for one delivery. This kind of insurance is commonly purchased by irregular shipping companies, or by another party who wishes to reduce their risk of loss on one shipment. Insurance purchased on small delivery packages through a delivery service is a derivative product of single transit insurance.

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