The Importance and Selection Guide of Foreign Trade Transportation and Insurance

With the development of globalization and international trade, more and more companies have begun to get involved in the import and export business. However, the risks faced by the import and export business have also increased, such as natural disasters during cargo transportation, accidents caused by human factors, pirate attacks, etc. In order to reduce risks and protect the assets and interests of enterprises, foreign trade transportation insurance came into being.

Types of cargo transportation insurance

General marine insurance

Insurance companies only provide insurance compensation for specific risks that occur during the transportation of goods by sea, such as piracy, sea storms, collisions, etc.

All risks

The insurance company provides compensation for any loss and damage that may occur to the goods during the entire transportation process, regardless of the specific cause and the extent of the loss.

Comprehensive insurance

Combining general marine insurance and all risks, the coverage is more comprehensive.

Insurance insurance options

Different insurance types mean that the results of compensation from the insurance company after the goods are damaged during transportation are different. If you choose an insurance company to cover a wide range of risks, the policyholder will have to pay more insurance premiums; otherwise, the insurance premiums you will have to pay will be less. Therefore, whether the seller insures or the buyer insures, their choices or requirements for insurance coverage are different. Therefore, it is best to clearly stipulate the choice of insurance coverage in the contract to avoid disputes in the future.

The principle of choosing insurance coverage is: not only to protect the transportation risks of goods, but also to reduce insurance expenses. Therefore, insurance coverage should be selected based on different circumstances such as the characteristics of the goods and their packaging, means and methods of transportation, transportation areas and ports. For example, grain cereal commodities are susceptible to the effects of moisture. After long-distance transportation, the moisture may evaporate, which can easily lead to short supply of such products; these products can also absorb moisture in the air, and if absorbed excessively or immersed in seawater or fresh water, it can easily cause mildew. When choosing the type of insurance for this type of product, it is generally necessary to add short-term insurance and moisture and heat insurance on the basis of water damage insurance. For another example, if liquid chemical products are transported in bulk tanks, short quantity and contamination are likely to occur, and short quantity insurance and contamination insurance should be insured; if they are packaged in iron barrels, tin cans, plastic barrels, etc., leakage is prone to occur. Leakage insurance can be added to Ping An Insurance.

The importance of foreign trade transportation insurance to enterprises

Foreign trade transportation insurance is very important for enterprises. First, it can reduce the risk to businesses during transportation. Although the risks of each shipment of goods are unpredictable, companies can reduce risks by purchasing foreign trade transportation insurance to avoid unbearable losses. Secondly, foreign trade transportation insurance can protect the assets and interests of enterprises. If the goods are lost or damaged during transportation, the insurance company will compensate the company according to the contract to ensure that the company’s assets and interests are not lost. Finally, foreign trade transportation insurance is also one of the key factors for companies to gain trust and cooperation in international trade. Many importers and exporters will require each other to purchase insurance during the transportation of goods to protect the interests of both parties.

Conclusion

Foreign trade transportation and insurance play a very important role in international trade. Foreign trade companies need to choose the appropriate type of insurance based on the situation of the goods and the specific mode of transportation, and communicate and coordinate effectively with all relevant parties to ensure the safe transportation of goods and insurance compensation. In international trade, cargo transportation insurance is an indispensable part, which can help foreign trade companies ensure the safe transportation of goods and reduce risks and economic losses.