Incidents at sea including extreme weather events, fires, and vessel groundings have been all too common in recent years. Shippers that are not well versed in the fine print within the vessel line or freight forwarder’s terms and conditions are often unaware their cargo is uninsured after it arrives damaged or does not arrive at all. Both vessel lines and freight forwarders are legally protected by force majeure and general average clauses within their tariffs or terms and conditions, potentially leaving shippers stuck with a large monetary loss.
A force majeure is defined as an extraordinary event outside of a party’s control, such as a war, strike, riot, crime, or event described by the legal term “act of God” (hurricane, flood, earthquake, volcanic eruption, etc.) which prevents a party from fulfilling its duties under the contract.
General average is declared by the vessel owner when damage or loss to cargo voluntarily occurs to preserve the safety of the vessel, crew, and property on board. Any monetary losses are then shared amongst all the stakeholders (cargo owners, vessel owner, etc.).
For cargo loss or damage events that do not result in a force majeure or general average, international conventions, which are industry standard on vessel line or freight forwarder’s terms and conditions, provide further protection by limiting liability and often leave shippers receiving far less than the full commercial value of their loss.
So, what can shippers do to protect their interests? Smaller to mid-size companies quite often do not carry their own open cargo policy due to high premium costs. Shippers that do carry cargo policies will many times have higher deductibles which only provide coverage in the worst-case scenario. This may still leave shippers with substantial losses and dissatisfied customers.
BDP International, Inc., a global logistics provider with over 56 years of experience in the industry, offers an inexpensive insurance solution for its customers, which provides peace of mind when cargo is no longer in their possession.
Shippers’ interest, also known as cargo insurance, provides loss and damage coverage for all primary modes of transportation (air, ocean, trucking, and rail), as well as warehousing, at a low cost with no deductible and minimal exclusions. Coverage points worth noting are door-to-door shipments, force majeure events (i.e. vessel fires, etc.), general average expenses, theft, high value cargo and temperature-controlled freight.
BDP provides customers with the opportunity to insure all their shipments or pick and choose which shipments they would like to insure, so they are not committed to an all or nothing product. Insurance may be used under BDP contracts with its providers, as well as customer contracts with transportation companies.
BDP focuses on offering shippers’ interest as a solution for uninsured or under-insured customers that do not want claim payments limited or denied as the result of industry standard liability limitations.
The company’s overall experience in offering shippers’ interest has been an extremely positive one. The product provides transparency between the company and customers about industry standard liability limitations and presents a solution to those who may want an extra level of comfort.
Providing an insurance solution upfront when gaining a new customer allows BDP to demonstrate that we are doing everything we can to protect their cargo interests.
BDP International has seen its shippers' interest offering grow globally over each of the past seven years and will continue to focus on educating both its internal teams and customers about the benefits of the product as well as the risks and exposures that come with not being properly insured. To learn more, please reach out to your local BDP representative.