Modern international trade now involves modes of transport from the seller’s country to the buyer’s country. So it is very important to have insurance which covers sea, road, rail and air freight movements. This is a reason many companies looking Global Solutions Insurance Services.
Insurance of goods during their transit from the exporting country to the importing country is an important incident in an international sale transaction. Most goods in international trade, apart from smaller and non-expensive deliveries, are covered by cargo insurance, providing cover against physical loss or damage whilst in transit, either by land, sea or air by a combination of these modes of transport. The export sales contract with the buyer must clearly state who is responsible for arranging the insurance at all stages from the time of merchandise leaves the exporter’s premises until the buyer takes possession.
The type of risks covered by cargo insurance depends on the terms of the insurance policy. There are no fixed rates in cargo insurance. The premium is calculated on the basis of the values of the merchandise, the commodity shipped, and the destinations. This process of assessing the premium is known as underwriting and the cargo insurance contract is embodied in a document called a policy cargo insurance.