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Cargo coverage: How it applies to every business

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By Paul Pukis
Capital Asset Protection
Published: Wednesday, May 1, 2013, 12:01 a.m.
  • Paul Pukis

    Paul Pukis

Placing insurance on precious assets has been around for many years in the U.S. The oldest form of insurance is marine cargo insurance, which dates back to 3000 BC when Chinese merchants deliberately spread cargo among several ships to reduce the risk of potential loss to the entire shipment. The more common form of insurance we recognize today, paying a small premium to cover assets of much greater value, originated in the 11th and 12th centuries in Europe. Danish navigators formed groups that collected a little money from each member to pay for losses at sea, should they occur. Now, how does all this pertain to you and your business?
The Pacific Northwest is a hub of import and export business and just about anything you, as a business owner, buy to use in your business that arrives on your doorstep via ship, barge, plane, train or truck qualifies for cargo coverage. You may think that this coverage can be purchased from the freight forwarder and you’d be right. However, this option is similar to buying rental car insurance from the rental car company at its counter, where the cost can be four times more than the cost of coverage you can procure elsewhere.
There is likely a better solution for you. When you purchase cargo coverage on your own, it’s possible to reduce the shipping cost on your products, which may pay for the cost of the coverage.
Consider these examples of where this coverage comes into play: A tractor-trailer overturns on the interstate and your entire order is damaged; rough seas wash several ship containers overboard to become artificial reefs for ocean critters; the train carrying your products from the Midwest or East Coast derails. We’ve all seen that on the news. When you buy this coverage yourself, you have “warehouse to warehouse” coverage.
A “warehouse to warehouse” policy with an A-rated insurance company covers any potential problems, from when your product sits on the floor of the manufacturer or wholesaler until it is securely in your building so you eliminate any questions about who to contact if you need to report a loss.
Working through a freight-forwarder and its third-party vendor on an insurance claim may cost more in the time you’ll have to devote to the loss than it’s worth.
If you’re unsure about how this coverage might protect your business or to learn more about the options for your existing coverage, the cargo specialists at Mosaic Insurance Alliance LLC can provide additional advice.
For other questions about your business insurance, contact Paul Pukis at Mosaic Insurance Alliance LLC at 425-320-4280 or SuperAgent@MosaicIA.com.
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