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Cargo Insurance: Why Insure your Cargo?

 

 

ALPI USA, Inc.’s role and what you will recover should a loss occur

 

Shipping by Ocean

 

While ALPI USA, Inc. arranges for the transportation of your goods, by law, it is the carrier who bears responsibility for loss or damage to your freight. The carrier’s liability for freight moving over the ocean is governed by the Carriage of Goods by Sea Act (COGSA). Under the terms of COGSA, the most you could recover from shipping lines in the event they are proven negligent is $500 for each customary freight unit (CFU). Measurement of the CFU is widely defined, and it can vary from one container to one pallet.

 

COGSA is centered on the liability of the carrier. At the heart of the concept of carrier liability is the idea that the carrier is not responsible for paying claims if they did not cause or contribute to the loss.  In the event that ALPI USA, Inc. acts as an NVOCC and assumes carrier liability, recovery in the event of a claim is still limited by COGSA in the bill of lading terms and conditions.

 

In an effort to better define carrier liability, Hague-Visby rules were created to define 17 circumstances under which the carrier cannot be held liable. If a loss is caused by any one of the following defenses; the ocean carrier will not pay for any part of the loss.

 

Fire

Defects not discoverable by due diligence

Perils or dangers of the sea (storms, etc.)

Quarantine restrictions

Act of God

Acts or omissions of the shipper or owner

Act of War

Strikes, lockouts or labor shortage

Act of public enemies

Riots or civil commotions

Arrest, restraint or seizure

Inherent defect, quality or vice of the goods

Insufficient packing

Attempting to save life or property at sea

Any neglect, default, or error of the carrier in navigation of or management of the ship

 

 

Shipping by Air

 

Air carriers limit their liability in a similar fashion as ocean carriers. Under the Montreal Convention, carriers will pay 19 SDRs (about $28) per kilogram only if it can be proven they were negligent. Once again, the burden of proof is on the shipper, and it is often difficult to prove that the carrier was at fault.

 

How Can You Protect Yourself? Advantages of Insuring Your Cargo Through ALPI USA, Inc.'s Policy

 

“All Risk” Shipper’s Interest Coverage provides the owner of the cargo with coverage for direct physical loss or damage to the cargo without the need to prove liability. If a loss occurs; you will be paid directly and any recovery possible from the carrier will be handled by our subrogation specialists.

 

Advantages of Insuring Your Cargo Through ALPI USA, Inc.'s Policy

 

  • Covered Losses are paid without the need to prove carrier negligence. After your loss is paid, we work with the carriers to ensure your historical losses are minimized.
  • No need to demonstrate where the loss occurred
  • ALPI USA, Inc. will report and handle claims on your behalf