How to Manage Cargo Insurance for Transportation Companies
Transportation companies play an important role in keeping supply chains moving, but that responsibility isn’t without risks. Cargo insurance helps safeguard businesses, protecting them from the financial strain of lost, damaged, or even stolen goods.
If you have a transportation company, this blog is for you. We’ll cover how to approach cargo insurance effectively so you can protect your company while maintaining customer trust.
Understanding Cargo Insurance Coverage
What is cargo insurance coverage? It’s a policy that protects goods being transported by land, sea, or air. Typical policies cover losses due to:
- Theft
- Damage during transit
- Natural disasters
- Accidents
Depending on your selected provider, your policy can be customizable. You may be able to secure comprehensive cargo insurance coverage or even “named peril” protection to only cover specific risks. Knowing your policy details ensures you can effectively mitigate risks while avoiding unexpected costs, so be sure to thoroughly review coverage before locking in.
The Role of Freight Brokers
Freight brokers are professionals who connect shippers with carriers. Therefore, they play an important role in managing cargo insurance for transportation companies. As your local freight broker cargo insurance provider, we can help simplify the process of selecting a reliable carrier and securing the right level of protection for the goods you transport.
Factors That Influence Costs
Outside of the specific carrier you select, several factors influence the cost of cargo insurance, including:
- Types of goods being transported: Do you frequently transport high-value items? Or extremely fragile ones? That could mean higher premiums because of the increased risks of carrying such goods.
- Transportation mode: It’s not only what you transport that can influence insurance costs but how you transport it. The specific risks that come with each mode of transportation may affect your premiums. For example, if you ship by sea, there may be additional costs thanks to piracy risks or dangerous weather.
- Claims history: Do you have a history of frequent claims? Then you may face higher premiums, as providers could view your transportation company as higher risk.
- Limits and deductibles: While selecting a higher policy limit or lower deductible will increase costs, they’ll also provide greater coverage. When choosing your cargo insurance policy, it’s important to factor in adequate coverage, not just costs.
The Importance of Regularly Reviewing Cargo Insurance Coverage
The needs of your transportation company are constantly evolving; make sure your cargo insurance policy evolves alongside it! Regularly reviewing your coverage ensures it stays aligned with current operations and needs.
Additionally, periodic reviews can identify gaps in coverage or opportunities for cost savings, like qualifying for new discounts or implementing risk mitigation measures that lower premiums. Open communication with your commercial insurance provider or freight broker and reviews of your policy at least once a year can help protect your transportation company.
Need Coverage? Partner With Hoffman Hanono Insurance
Let our insurance experts help your transportation company mitigate risks, keep operations moving, and stay protected. As a full-service commercial insurance agency, we’ll introduce you to the options that suit your needs and price point, further positioning you for success. Request a quote to begin exploring your cargo insurance options!