CARM: What all importers need to know about CARM

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Route Article

Who needs cargo insurance? Everyone! An open letter from two industry experts

     Debbie McGuire, Manager – Freight Solutions
  Debbie McGuire
Manager – Freight Solutions
 
  David Lychek
Manager – Ocean & Air Services

To our valued clients:

With over 50 years of combined experience handling cargo insurance claims, Debbie McGuire, Manager – Freight Solutions and David Lychek, Manager – Ocean & Air Services have seen it all.  Most importantly, they have seen first-hand what happens when importers and exporters fail to get the proper insurance.  “The financial consequences can be disastrous,” notes Ms. McGuire, “yet the cost of purchasing cargo insurance is fairly minimal.  That’s why I always say the one area that you should never skimp on is cargo insurance.”  

Another key issue is the lack of understanding about who is responsible for losses or damages.  “The parties involved in a freight move (carriers, warehouses and forwarders) have some liability in the event of a loss or damaged shipment,” explains Mr. Lychek.  “But the extent of this liability varies and it is typically much lower than the value of the actual goods.  In addition, it takes a long time to be reimbursed, especially versus an insurance claim payment, which is usually made very quickly.”

Yet another misconception is that the potential loss is limited to the value of goods that are damaged or lost.  “If the vessel carrying your goods is damaged at sea or forced to jettison containers overboard to save the ship, every entity with a container on the ship has to cover the resulting costs, known formally as ‘General Average’.  The cost could run into the millions.  It is just not worth the risk.” (See Megaship pulled off sand bar by fleet of tug boats)

Look for our upcoming issue of Route (Fall 2017) which will be dedicated to this incredibly important topic.

 
Debbie McGuire
  David Lychek

 

Quick Tip #6
The perils of being under insured

Make sure you read the fine print before purchasing insurance abroad for freight shipments.

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