Cargo Delay Insurance: We are all aware of the challenges when supply chains come under pressure blockages in the Suez Canal, wars in Ukraine, and things like that. It’s very hard to understand how to price those accurately, and many of those go uninsured.
The cargo policy is intended to insure for physical loss or damage to the goods. So for example, if you were shipping a container full of Christmas cards and they got there after Christmas, you would obviously have a loss of market there, but the product itself is still intact. So the shipper’s interest piece is strictly there for the physical loss or damage — theft, hijacking, rough handling, things of that nature. If it comes down to inherent vice, say perishable goods that have not been shipped in a temperature-controlled container, ice cream that melts, those types of things actually be physical loss or damage. Delay and loss of market is something that the actual shipper’s interest piece would not probably speak to.
Traditional cargo insurance mainly covers physical loss or damage, so if your shipment arrives late but the goods are fine, then usually no payout will be made. It has become a big problem for time-sensitive deliveries or seasonal products where delays can lead to loss. This is where parametric cargo insurance come into picture. It is designed to protect you against delays, with payouts triggered automatically when a shipment is late, even if nothing is damaged.
Cargo Delay Insurance with Parametric Coverage
Today many Insurance companies are coming up with cargo delay coverage to the freight and logistics sectors using parametric insurance technology. With this insurance, clients benefit from a unique set of coverage and features, from lifting an exclusion, streamlining the claim and payment process, to offering flexible endorsement coverages. The Carogo delay insurance products provide clients with state-of-the-art cargo and insurance automation.
Risks Covered under Cargo Delay Insurance with Parametric Coverage
These are the risks and exposures covered under Cargo Delay Insurance with Parametric Coverage: cargo destruction, business interruption, consequential damages, commodities price loss, extra logistical expenses, and reputational risks. Parametric delay coverage offering customized insurance parameters and limits, speed and transparency of claims payments. All available with flexible formats: transactional, annualized, and complimentary.
So how does parametric work exactly?
Your cargo arrives at the port of origin and is loaded onto the vessel for departure. Once the vessel departs after the actual time of departure (ATD), your policy starts. When the actual time of arrival (ATA) exceeds the threshold, your policy is triggered. Finally, your delay claim is paid automatically.
Now let’s get started and bind your first cargo delay policy. Using your credentials, log into the website provided by the insurance company and navigate to the Air Freight Manager tab, and enter your airway bill (AWB). Then add the origin and destination airports. Select your delay insurance limit from the drop down for your desired shipment. Select your delay trigger ranging from 3 hours to 12 hours. Review your policy, add an internal reference code if necessary, then navigate to the checkout page. You can now confirm, bind, and purchase your delay policy in a few clicks. You will then receive your Certificate of Insurance via email within minutes. It’s that simple.
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