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Frequently Asked Questions

No. Normally, approved general merchandise is insured "all risk." This means that coverage is extended to cover physical loss or damage from any external cause, subject to your cargo policy exclusions, terms, conditions and deductibles. The following are standard exclusions (things that are not covered) for all risk coverage:

  • Improper Packing
  • Abandonment of Cargo
  • Rejection by Customs
  • Failure to pay or collect accounts
  • Inherent vice
  • Employee conversion or dishonesty
  • Loss because of delay or loss of market
  • Losses in excess of policy limit
  • Losses in South America more than 60 days after discharge from overseas vessel or aircraft
  • Losses at port city more than 15 days after discharge from overseas vessel or aircraft
  • Losses inland more than 30 days after discharge from overseas vessel or aircraft
  • Barge shipments
  • Goods subject to on-deck bills of lading
  • Loss caused by temperature or pressure (air shipments only)
  • Failure to notify air carrier of preliminary loss in timely fashion: Obvious damage - 7 days Hidden damage - 14 days Non-delivery - 120 days
  • Failure to notify steamship line of preliminary loss within one year of ocean bill of lading date.

F.P.A. stands for Free of Particular Average. This means that the coverage is very limited and on a "named perils" basis. F.P.A. named perils are such as the sinking, burning, stranding, collision of vessel or catastrophic perils on shore. Shore perils include such events as earthquakes, derailment, collapse of dock, fire, etc. Under a policy written F.P.A.; nothing else is covered unless specifically stated. Always refer to your policy's exclusions, terms, conditions and deductibles

A bond is not an insurance policy but a financial guarantee placed on your behalf to a third party, i.e. US Customs or Federal Maritime Commission. The insurance company providing the bond is known as the surety. Should they have to pay out a claim then they have the right of recovery from you.

The surety, or bonding company, will not issue a bond unless they are assured that they can recover their money if they must pay a claim. This is also why the sureties require comprehensive financial statements. Having your spouse sign the agreement protects the surety by giving them another party to whom they can turn for payment if you should default on your obligation. For example, if a couple gets divorced and one spouse takes all the money and there is a claim; the surety could go after the one with the funds.

Without a bond, you would have to come up with the bond amount in cash, i.e. $50,000 or $75,000 or the amount stated by the governing agency to meet their requirements for licensing or clearing of goods, etc.

Freight forwarders and NVOCCs (Non-Vessel Operating Common Carriers) are two entities that have become virtually one and the same over the years.

There are, however, distinct differences between freight forwarders and NVOCCs; the biggest one is how they act in relation to the cargo. An NVOCC acts as the carrier of the cargo being sent. They issue their own house bill of lading (a bill of lading is also known as a “contract of carriage” and is a legal document that binds both parties to the terms agreed upon). A bill of lading is important as it holds the NVOCC liable if and when the cargo becomes lost or damaged while in transit, wherein compensation is often necessary.

In comparison, a freight forwarder doesn’t act as a carrier. A freight Forwarder cannot legally issue a house bill of lading. A freight forwarder only acts on behalf of the owner of the cargo to facilitate the passage of the cargo from the point of origin to the destination. They contract carriers to pick the cargo up, board it on a ship or a plane, then another carrier to pick it up at the port; along with the entailing paperwork and documentation. As a freight forwarder doesn’t issue a bill of lading, he/she is not liable for any damage or loss suffered while the cargo is in transit. It is the freight forwarder’s job, though, to get the bills of lading from the carriers contracted. The liabilities of the freight forwarder only extend over possible errors on their part, such as incorrect or incomplete paperwork.

Warehouse Legal Liability; - Is insurance for warehouse storage operations and for the logistics industry in particular it works as follows always subject to your policy terms and conditions. This means the merchandise is entrusted to your care, custody and control for direct physical loss or damage. This covers for the goods maintained inside of your warehouse of your client based on your warehouse receipt &/or your posted terms & conditions.   They do not pay based on the value of the goods (commercial invoice) but on your terms & conditions printed on your warehouse receipt or invoice or posted on your website. This is not full recover of the value of the goods stored for your customers.

Warehouse All Risk Coverage - Is insurance for warehouse storage operations for the logistics industry in particular. This means it’s entrusted to your care, custody and control for direct physical loss or damage. This coverage is for full commercial invoice value the goods maintained inside of your warehouse for your clients up to your chosen policy limit. A valid claim would be paid less the applicable deductible(s) and it’s for the full commercial value but never to exceed the limit you choose for the coverage under your policy. This coverage normally can be included under your cargo insurance policy and/or a property policy.

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