Truckers or freight companies often try to remain frugal when it comes to purchasing load insurance to reduce their overall expenditures. However, there are several problems they may run into down the road that may make it more worth the investment than they anticipated. Here are a few reasons cargo insurance is a must have.
1. Required By Contract
Some companies which hire trucks to haul cargo or goods may require load insurance up front before they agree to have you ship for them. If the goods end up lost or damaged the truck owner is required to pay for damages. If the terms of the contract are breached then the truck owner may also face legal issues or post-term financial losses.
2. Protection Against Underinsured Claims
The truck owner or freight company can’t always depend on the buyer’s or seller’s insurance to cover the total value of the load unless their insurance details had been discussed beforehand. If a buyer or seller purchases insurance from a foreign location or obscure broker and there is a claim, the freight hauler could end up paying more in legal fees than damages.
3. Paid Export or Import Risks
If a freight company hasn’t been paid for the goods they are selling in an export, they face a risk of losing the value of the cargo if they are damaged. Likewise, a freight company who has already paid for goods they are importing can not be reimbursed for the value of the haul.