Transport insurance

Why take out transport insurance?

The transporting company / forwarder is only partially liable for damage to goods shipped by him. In some cases, he is not liable at all. For instance, in case of force majeure, or if you haven’t packaged the goods properly. Goods can also get damaged or lost during transport. By taking out transport insurance, you can cover these risks.

Agree on the liability

You and your business partner should reach an agreement on who is liable for damages, loss or theft of the goods at which point of the transporting process: when does liability transfer from the seller to the buyer? You can use the ICC Incoterms® 2010 standard international delivery conditions. Transport insurance is obligatory when you opt for the ICC Incoterms® 2010 CIF (Cost insurance and freight) or CIP (Carriage and insurance paid to) terms. You do not have that obligation when using different ICC Incoterms® 2010 terms, but it is advisable, since damage or losses might occur during the part of the transport for which you are liable.

ICC Incoterms® 2020

The ICC have released Incoterms® 2020, an update to the Incoterms® 2010. However, the Incoterms® 2010 remain valid. Find out more on the ICC website.

Sellers interest insurance

If damages or losses occur during the phase of transport for which your customer is liable, but he refuses to pay despite your agreement, sellers interest insurance will cover the amount the buyer won’t pay for the lost or damaged goods. If your customer cannot pay, this insurance will not cover your losses. You could take out credit insurance to cover this risk; when you have credit insurance, you pay a percentage of your turnover, in return for assured payment. You could also ask your customer to pay in advance.

Continuous coverage or insurance per shipment

If you trade and transport goods on a regular basis, continuous coverage is your best option. All your shipments will be insured for a pre-determined amount during a set period of time. If you only transport goods occasionally, you can take out insurance per shipment.

Tailor-made transport insurance

Your insurance company or agent can assist you with information and advice. You can also take out transport insurance with carriers who are members of Fenex (in Dutch).