The ABC’s of Cargo Insurance

Learn the basics of cargo insurance claims from ABCs.

Whether you are a fruit exporter or a logistics newbie.

This can serve as a fun way to start your journey.

These are non-technical definitions of often used technical terms.

A - Adjuster
The professional responsible for evaluating the claim and determining the insurance company’s liability.

B - Bill of Lading
A legal document issued by a carrier detailing the type, quantity, and destination of the goods being carried.

C - Claimant
The person or entity presenting the claim to the insurance company for losses sustained.

D - Deductible
The amount the policyholder must pay out-of-pocket before the insurance company pays the claim.

E - Exclusions
Specific conditions or situations where the insurance policy will not cover the damages.

F - Freight Forwarder
A firm specialising in organizing shipments for individuals or corporations to get goods from the producer to a market or final point of distribution.

G - General Average
A principle where all shippers on a voyage share the loss when cargo is intentionally sacrificed to save the vessel.

H - Hull Damage
Damage to the structure of the vessel.

I - Incoterms
Internationally recognised terms defining the responsibilities of sellers and buyers for the shipment of goods.

J - Jettison
The act of throwing cargo overboard to lighten a vessel in distress.

K - Known Damage
Damage that was known or should have been known at the time of shipping.

L - Liability Limits
The maximum amount an insurer will pay for a covered claim.

M - Mitigation
Actions taken to minimise the loss or damage after an incident has occurred.

N - Notice of Claim
Formal notification to the insurer about the intention to seek compensation for losses.

O - Ocean Bill of Lading
A document confirming the receipt of cargo and the contract for its transportation.

P - Perils
Specific risks or causes of loss covered by the insurance policy.

Q - Quantum
The amount of compensation or claim value.

R - Rejection
Denial of the claim by the insurer.

S - Salvage Value
The value of damaged cargo that can be sold or recovered.

T - Total Loss
When the cargo is completely lost or the cost of repair exceeds its value.

U - Underwriting
The process of evaluating the risks of insuring a person or asset and determining policy terms and pricing.

V - Valuation Clause
A provision in the insurance policy that specifies how the value of lost or damaged property will be determined.

W - Warehouse to Warehouse
A clause in cargo insurance policies that ensures the cargo is covered from the point of origin to its final destination.

X - Ex Gratia Payment
A payment made where there isn’t any obligation or liability to pay.

Y - Yearly Renewable Policy
A policy that renews annually, typically used for frequent shippers.

Z - Zone Restrictions
Geographical areas where coverage may be limited or excluded.