Cargo insurance during transport is a crucial aspect that should not be overlooked by any company involved in the transportation of goods. The significance of this insurance was demonstrated in the spring accident of cargo ship in Baltimore, where containers were damaged and lost because of the ship hitting the bridge structure. Without adequate insurance, cargo owners would face enormous financial losses that could devastate their business.

Financial risks and liability

As demonstrated by the Baltimore incident, damage to transported goods can reach hundreds of millions of dollars. However, the liability for cargo damage may not be as severe for the shipowner due to the total number of claims. The final damage estimate will be determined after a detailed inspection and further investigation. Currently, it is known that two containers were lost, and several others were damaged, leading to potential claims.

Legal liability limitations

According to the Hague-Visby Rules, which are likely applicable to this incident, the shipowner's liability is limited to a maximum of 2 SDR (Special Drawing Rights) per gross kilogram of goods. For example, if a cargo owner loses a container weighing 10,000 kg with a value of EUR 100,000, the sea carrier's liability is limited to approximately EUR 25,000. Without insurance, the cargo owner would only receive this amount, which is four times less than the cargo's value.

Benefits of cargo insurance

For companies with insured cargo, there is no problem in receiving compensation. Insurance covers basic risks such as collision with any external object other than water. This type of risk is commonly included even in basic insurance coverage. By ensuring cargo during transport, companies ensure that they are protected against accidents, which unfortunately occur.

Practical example

If the company in the example had its cargo insured, it would receive an additional EUR 75,000 from the insurance company, making the total compensation equal to the cargo's value. Without insurance, the loss would be EUR 75,000, which can have significant financial implications for the company.

Colonnade's Cargo Insurance: Added benefits

Colonnade offers extensive cargo insurance that covers various transport risks. Some of the key features and advantages of Colonnade's cargo insurance include:

  • Flexibility and high underwriting capacity: Policies can be tailored to the specific needs of the client, covering everything from consumer goods to industrial projects worldwide.
  • Marine loss control: Proactive risk management to prevent up to 70% of potential losses through expert advice and effective measures.
  • Comprehensive coverage: Protection against loss, damage, or destruction of goods during transport, including piracy and additional risks like war and political unrest.
Maciej Specjalski, Senior Underwriter