The reason marine cargo insurance is essential
We're often asked why businesses that ship goods into and out of New Zealand need marine insurance, and what makes it different from shipping insurance.
The short answer is – marine cargo insurance is essential. We may think we only need to protect our goods from damage, but when your goods are being transported on international waters many factors may be the difference to your being compensated.
Risks covered by cargo insurance include dock strikes, rogue waves, heavy seas, loss of refrigeration, and even earthquakes that may impact containers on land. This insurance provides protection for cargo owners against financial losses resulting from these risks during the transportation of their goods.
The carrier of your goods is not always liable for any damage or delays
While the carrier may bear some responsibility for the loss of goods in transit, their liability is often limited and may not be sufficient to cover the full costs incurred by many businesses. Therefore, businesses need to take steps to protect their goods during shipping and consider additional insurance coverage to mitigate the financial risks of loss, damage or even theft.
Why do laws that were made centuries ago play a part in my marine cargo insurance requirements?
The continued existence of ancient maritime laws can be attributed to the unique challenges and risks associated with shipping and trade by sea. The high seas are a lawless frontier where different legal systems can clash, and disputes can arise between parties from different countries. To facilitate international trade and ensure the safety and security of ships and crews, a uniform body of maritime law has emerged that applies to all vessels and their cargo, regardless of their country of origin.
While some of the ancient customs and practices that shaped maritime law may seem outdated or obsolete, they continue to play an essential role in ensuring the smooth functioning of the global shipping industry. As long as shipping remains a critical component of international trade, the principles and practices of ancient maritime law will continue to inform and shape modern legal systems.
What is 'General Average' and why does it affect my insurance?
General Average is a longstanding principle of maritime law that ensures that all parties share the burden of expenses incurred for the common good during a voyage. The principle is based on the concept that when a vessel encounters a peril at sea, the sacrifice made to save the entire venture should be shared proportionally among the parties who benefited from that sacrifice. The application of General Average can be complex and requires careful attention to the legal and contractual obligations of all parties involved.
How do I know I've got the right type of insurance cover for my goods?
Your freight forwarding company should arrange your insurance and their broker will advise on the best cover for your particular shipping situation.
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