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Freight Insurance for Freight Forwarders

Maria Paula Rodríguez
Maria Paula Rodríguez |
Freight Forwarder's Freight Insurance
3:56

In international trade, freight forwarders play a fundamental role: connecting cargo generators with a safe, efficient and reliable logistics operation. However, one of the most frequent mistakes in the logistics chain is to underestimate the importance of cargo insurance or treat it as a simple administrative requirement.

Correctly advising on a cargo insurance policy not only protects the cargo, but also protects the commercial relationship, the reputation of the freight forwarder and the continuity of the client's business. In this article we explain why international freight insurance should be a priority in your advisory and how to do it professionally.

Why freight insurance is key in logistics consulting?

The transport of goods - whether by sea, air or land - is exposed to multiple risks: theft, breakdowns, handling damage, accidents, weather events and operational errors.

When a cargo generator does not have adequate cargo insurance, the consequences can be serious:

  • Direct economic losses

  • Contractual disputes

  • Claims against the freight forwarder

  • Interruption of the logistics operation

A freight forwarder who advises well on insurance adds real value to his service.

 

Carrier's liability with cargo insurance

One of the most common mistakes is to assume that the cargo is "already covered" by the carrier or shipping line; for this reason it is good to understand that:

  • The carrier's liability is limited by international conventions (CMR, Hague-Visby, Montreal, etc.).

  • The indemnity is usually much lower than the actual value of the cargo.

  • It does not cover all risks or all scenarios.

A well-structured international transport insurance policy, on the other hand, covers the actual declared value of the cargo:

  • Covers the actual declared value of the goods.

  • Protects door-to-door (subject to conditions).

  • Responds to real unforeseen events in international trade.

The role of the freight forwarder as risk assessor

Today's market demands more than just freight quotes. Freight generators are looking for strategic allies who understand their operation and its risks.

What do customers expect from a professional freight forwarder?

  • Identify risks according to type of goods

  • Recommend the right type of cargo insurance policy.

  • Explain exclusions, deductibles and limits.

  • Anticipate loss scenarios

An agent who does not provide insurance advice leaves the client and himself exposed.

 

What should a good international transport insurance have?

Not all insurance is the same. To advise correctly, it is key to know the basic elements:

Essential coverages.

  • Total and/or partial losses.

  • Theft and qualified theft with violence.

  • Damage during loading and unloading.

  • Climatic events.

  • General Breakdown.

Factors influencing the policy

  • Type of merchandise

  • Route and country of destination

  • Means of transport

  • Packaging

  • Claims history


Real risks faced by freight forwarders today

The current context of international trade has increased risks:

  • Increased cargo theft on critical routes

  • Port congestion and increased handling

  • Extreme weather

  • Increased claims on certain commodities

Poorly structured cargo insurance can mean no coverage when it is needed most.

How can a freight forwarder best advise its customers?

Key best practices

  1. Involve insurance as early as the logistics quotation

  2. Work with a broker specializing in cargo insurance

  3. Do not assume standard coverages

  4. Validate values, packaging and type of goods

  5. Clearly explain scope and exclusions

At JAH Insurance Brokers, we work hand in hand with freight forwarders to turn insurance into a competitive advantage, not an afterthought. So ifyou are a freight broker and want to better advise your clients, we can help you structure cargo insurance policies aligned to the real risk of each operation.

Free consultation

Contact us and strengthen your logistics value proposition.

 

 

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