Most experts agree the very first insurance policy was written in Genoa in 1347. The following century saw the expansion of the insurance concept into many different categories, including maritime insurance, where premiums were directly correlated to risk. Today, insurance is its own complex industry, with products that require a wide number of skills to understand, develop, and implement.
Cargo insurance tends to be an area that retains some mystery, yet remains one of the most helpful, comforting, and crucial tools that importers need -and lean on- when an unexpected situation arises.
Many importers figure they can self insure, and save money on the side to cover any unforeseen situations. This strategy rarely benefits the importer and can cost more money and time than anticipated. There are many reasons why it makes sense to build a cargo insurance program designed around an importer's needs. Here are just a few:
- Reduce Financial Loss Exposure
When goods are damaged, someone has to foot the bill. It doesn’t matter if an importer has paid for the goods prior to or on delivery. This will require additional funds that could have been used for other more prudent capital expenditures.
- Expedite Cargo Release
General Average is an internationally accepted principle where all importers of goods in a container share financial loss equally when damage occurs to any goods in the container. Rather than holding up goods in port to calculate what those costs are, the cargo insurance company assumes responsibility and allows those goods to move through port.
- Ocean Carriers Limit Liability
If any importer thinks the ocean carrier will cover the costs of goods being destroyed as a result of a natural disaster or piracy, they’re sorely mistaken. These situations are only covered by cargo insurance, which brings peace of mind to any open sea challenge.
A buyer or seller might have their own insurance policy, and relying on theirs is an option, however, it puts an incredible amount of risk on the importer, who is essentially operating on good faith. To retain control means to own and understand a cargo insurance policy that protects the importer against all loss.
The global impact of cargo losses exceeds 50 billion dollars annually. It remains crucial for importers and exporters to be vigilant and protect themselves against any outside damage to their goods.
ITC Diligence International Inc. has developed a 4PL strategy that importers on the supply chain have relied on for over 30 years. This means the knowledge, relationships, solutions, and products that ITC Diligence International Inc taps into for these importers has been tried and tested with a proven track record of success.
Partnering with insurance providers that hold themselves to the highest industry standards is an absolute must for ITC Diligence International Inc. Importers have many options when purchasing cargo insurance and Avalon Risk Management has demonstrated the expertise, industry knowledge, and focus on client service that is required in a cargo insurance provider and industry partner.
Enhancing importing and exporting solutions with cargo insurance is just one more example of how ITC Diligence International Inc. continues to build on the 4PL program and helps strengthen the resilience of the global supply chain.
Featured FTZ Fact
The Foreign Trade Zone Program in the United States is a significant boon to employment retention and job growth as well as the international trade industry. Companies receive incredible benefits when they manufacture goods inside an FTZ. Recent studies have shown that 57% of all goods received into a Foreign Trade Zone are free of duty or tax. The FTZ Program continues to be a proven leader in the United States; stimulating job growth and expanding the capabilities of businesses all over the country.
One of the oldest and largest distributors of spirits and wine in the airline industry, Tri-Link FTZ has been a partner of ITC Diligence International Inc. for over 5 years, and a true industry leader for more than 30 years. Expanding their services and relationships to accommodate imports in the cities of New York, Miami, and Los Angeles, Tri-Link FTZ has experienced incredible success and we at ITC Diligence International Inc. are proud to be part of their story.