Protecting your cargo is imperative in the trucking industry. A lot can go wrong on any journey that takes goods in transit from suppliers to customers.
While you’re going to need to have the required insurance for the trucks in your fleet as per the Federal Motor Carrier Safety Administration (FMCSA), having additional cargo insurance is something else you may want to consider to cover all of your bases.
What Is Cargo Insurance?
Cargo insurance gives you coverage on the freight or commodities that are being hauled by the truckers in your fleet. It provides liability for damage to the cargo or if the cargo is lost in an accident, fire, or other circumstance.
Having cargo insurance can protect you against financial losses while your goods are in transit. Some types may also cover the costs of preventing additional loss to damaged cargo. You may want to look into different cargo coverage options as they can additionally cover your legal costs in the settlement of claims and lost freight charges for being unable to deliver a load.
Common Types of Cargo Insurance
Cargo insurance for the trucking industry is often called motor truck cargo insurance. This is ideal for any cargo that is transported on land. It will cover some of the risks related to moving freight on the roads.
You may want to go for all-risk coverage, which will protect you from significant damage or loss due to external factors like damage from improper handling, theft, or even intrusive pests.
Warehouse-to-warehouse coverage protects your clients against any damages or losses caused while the cargo is in transit between different warehouses. Cargo insurance will additionally help cover many losses from natural disasters, motor vehicle accidents, and other situations.
Why Cargo Insurance Is the Essential Tool for Your Trucking Company
While it’s true that cargo insurance is not mandated by the laws that govern trucking, it is a valuable tool for protecting your business. When you’re starting out as a small trucking company, cargo insurance may seem like an added expense. However, the damage to a load could easily spell financial disaster for your business.
Some of the risks you face in the trucking industry are downright catastrophic, and having the right insurance in place will mitigate the fallout. You would likely never dream of letting trucks from your fleet run through the state or across the country without insurance coverage. The same is true for car insurance on regular vehicles since you buy it not only due to the laws but also because even the best drivers can be victims of accidents and thefts.
However, the crucial difference here is that trucking loads are separate. Insuring cargo ensures you have a safety net should a natural disaster, theft, or accident occur. Cargo insurance protects those goods in the event of a loss. It also eliminates the stress of tracing and proving liability should the worst-case scenario happen.
Benefits of Using Cargo Insurance
If you want to reduce the potential for financial loss, you should get cargo insurance. Here’s how it can benefit your fleet.
While it is an additional fee, paying for cargo insurance ensures peace of mind and prevents having to cover unexpected damages. Those damages are usually a far greater expense—and a major headache for everyone.
Almost everyone underestimates the costs associated with cargo losses and damages. When something happens, it’s usually a shock to see how much out-of-pocket you have to pay to cover these unfortunate events. Cargo insurance keeps clients covered.
It’s stressful enough to run a business, and when you’ve got cargo insurance for your clients, it can help keep those worries at bay. When cargo is safe and finances are protected by insurance, the focus can be put on expansion rather than living in fear that lost or damaged cargo could put you out of business.
Cargo insurance plays a vital role in keeping the trucking industry running. If you’re an owner-operator, you won’t want to go without it. Visit here to learn more about commercial trucking insurance to protect your cargo.