Logistics and insurance-Types of coverage

  • Types of coverage
    Open coverage:
    If the exporter has a recurring need for insurance, it is advisable to enter into a contract that is valid for a period of time, usually one year. In the main contract all the necessary stipulations that will be valid for the entire period are discussed and agreed only once. This means that valid coverage is always available during this period when needed. Compared to a valid insurance for each case, the open coverage system provides additional security, better economic conditions and a better relationship with insurance companies.
    Maximum exposure or limit of liability:
    The insurance contract with open coverage will stipulate the limit of the liability of the insurance companies when they indemnify the insured for a single case. The amount of liability may vary at each stage of transport or storage. When the insurance is valid for a single case (insurance per certificate), the amount declared in the insurance certificate is the limit of liability.
    Scope of insurance: full risk:
    Actually, the phrase “all risks” (or “all risks” in English) does not at all mean that all possible risks are covered. Normal storage and transport insurance mainly covers only losses due to physical damage to the goods that occur suddenly due to external causes or events.
    For example, insurance companies will never cover the risk of merchandise being unsuitable for use due to excessive moisture content or improper processing and will firmly reject all such claims.
    “Comprehensive” normally covers all the physical risks mentioned above. However, the contract may also include a list of hazards, especially for storage insurance. You have to be very careful with these lists. The insurance only covers the points (dangers) that are mentioned, nothing more. If the list includes only fires, lightning and floods, then risks such as contamination, infestation, soaking or theft are not covered.

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