Global trade offers immense opportunities for businesses, but it also comes with unavoidable risks. Whether goods are shipped by land, sea, or air, there is always the chance of damage, loss, or theft during transit.
For companies that rely on the safe and timely delivery of shipments, cargo insurance is not just a good idea — it’s an essential strategy for risk management. Whenever booking freight with Universal Logistics, ask about cargo insurance. We can help you find the best match between your needs and the available cargo insurance coverage options, with the sole purpose of protecting your interests and limiting risks when shipping.
Complete Protection Beyond Carrier Liability
Many businesses mistakenly assume that carriers will fully cover any losses if something goes wrong. In reality, carrier liability is extremely limited. Compensation from carriers is often calculated by weight or volume, not the actual value of the goods, leaving shippers exposed to substantial losses.
Cargo insurance, by contrast, provides total coverage. A typical policy insures not only the commercial invoice value of the shipment but also freight costs, with an additional margin of 10% to cover incidental or unforeseen expenses. This ensures businesses are not left absorbing the financial hit when unexpected disruptions occur.
Faster and Easier Claims Settlement
The claims process following a shipping incident can be complex, involving multiple parties such as carriers, freight forwarders and ports. Without dedicated support, it can drag on for months. When you arrange your own cargo insurance, the provider takes ownership of coordinating with all parties to expedite the settlement. This not only reduces administrative burden but also ensures businesses are reimbursed quickly, allowing them to resume operations without lengthy financial interruptions.
Protection from General Average – A Hidden Risk
One of the least understood yet most financially dangerous risks in maritime transport is “general average”. This principle of maritime law requires all cargo owners on a vessel to share in the costs of saving the ship if extraordinary measures are taken, such as jettisoning cargo or firefighting at sea. Without cargo insurance, businesses may be forced to pay significant sums to cover damages unrelated to their own goods. Insured shippers, however, are protected — their insurer assumes this risk, shielding them from catastrophic costs that can cripple operations.
Retaining Control Over Coverage
Another often-overlooked advantage of arranging your own insurance is control. By doing so, shippers can ensure policies are tailored to their exact needs rather than relying on carrier-provided coverage that may not fully align with their risk exposure. This control ensures complete transparency, proper limits of coverage, and peace of mind.
The Business Case for Cargo Insurance
In an increasingly uncertain global shipping environment, cargo insurance represents more than just protection. It is a strategic investment that safeguards profits, preserves customer relationships and allows businesses to operate with confidence. Choosing to arrange your own insurance is the best way to minimize risk, protect your assets and ensure continuity in your supply chain.
Bottom Line: For companies engaged in international trade, cargo insurance is not an optional add-on — it is a crucial tool for financial protection and long-term success. So, remember to ask us about cargo insurance options and pricing to ensure your freight is protected as well as having full visibility in the event of a claim, as we will act as your single point of contact, simplifying and expediting the process.
