Insurance of goods in transit from China

Update date:
01 Dec 2023
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Date of publication:
25 Oct 2023
Reading time: 5 minutes

In an era of globalisation and increasing trade between countries, transport from China is becoming increasingly important. This is why more and more people are considering the question of insurance for such transport. In this article, I will try to introduce you to this topic so that you can make an informed decision regarding the insurance of your goods. The first step in understanding this issue is to familiarise yourself with the different types of insurance available to rail transport, marine and aviation from China. I hope that the article has made the topic of insurance in transport from China clear and understandable for you. I invite you to read on!

CARGO insurance for transport from China

Transport from China by sea, rail or air carries many risks and the possibility of damage to the goods. Therefore, it is worth remembering that it is important to take out insurance for the goods.

The most popular type is Cargo insurance, which protects our cargo from damage during transport, loss or theft. It gives security against any unforeseen events that may occur when transporting cargo. 

Cargo insurance is available in several variants, it is all about the scope of protection it covers. The most extensive is the package with Institute Cargo Clauses (A) / Institute Cargo Clauses (A), which includes the broadest package of protection against all risks, i.e. the so-called ALL-RISK. 

 Next we have insurance with clauses B and C, which provide less support during unforeseen events. 

It is always advisable to make sure which CARGO insurance is taken out with the freight forwarder when carrying out transport. Ideally, this should be insurance with an A clause. Then we can have peace of mind during any unforeseen events. 

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Other types of insurance:

There are still carriers who take out insurance policies, but these may not be sufficient. There are a number of situations in which the insurer, in accordance with the law, may refuse to pay compensation or may significantly reduce it. It is therefore always worth taking out CARGO insurance, which protects our cargo in almost all cases and the process of obtaining compensation is relatively simple. In order to obtain compensation from a cargo policy, it is sufficient to prove that the damage actually occurred, without the need to establish the carrier's fault.

OCS policies

The freight forwarder's liability is limited to the exercise of due care during the execution of orders and does not cover incidents occurring during transport. The freight forwarder's liability policy does not protect the transported cargo.

OCP policies

The process of pursuing a claim under a carrier's third-party liability policy is complex and time-consuming. It is necessary to prove the occurrence of damage to the transported cargo, as well as the responsibility of the specific carrier for this damage.

Examples of limitations and exclusions

Weight restrictions - under the CMR Convention, the road haulier is only liable up to 8.33 SDR per kilogram of cargo. This means that the compensation under the OCP policy for lost electronic equipment weighing 1.8 kg will only amount to PLN 72. Similar restrictions also apply to rail, air and sea transport. Additional cargo insurance becomes crucial, especially for valuable cargo.

The exclusions of liability in the general conditions of insurance include gross violations of the highway code, damage due to force majeure and loading and unloading operations. In the event of damage resulting from these causes, no compensation will be paid.

Waiting for a long time to receive compensation from the carrier's third-party liability policy can generate a loss of liquidity for the company. Imagine a situation where high value machinery is damaged and you do not have CARGO insurance. 

Making compensation for stolen property conditional on the carrier meeting certain conditions regarding where the vehicle is parked and secured.

How much does CARGO insurance cost? 

The cost of Cargo insurance should usually be several USD and this is dependent on the value of the goods being transported. 

The cost of insuring US$10,000 worth of goods should average around US$20. It all depends on the conditions under which the shipping company sells the insurance. Generally, sometimes the minimum cost of insurance is USD 25. 

Key aspects of cargo insurance in transport from China 

During planning cargo insurance in transport from ChinaIt is important to consider several key aspects. First and foremost, it is important to thoroughly understand the cover offered by the insurer. Does it cover all potential risks, such as damage or theft Are there any exclusions that may affect compensation in the event of damage? Analysis of insurance conditions is therefore essential. Secondly, it is worth looking at the cost of insurance. Are they competitive compared to other offers on the market? Are they clearly defined and do they not contain hidden charges?  Choosing the right insurer can significantly minimise risk and provide peace of mind when transporting goods. All shipping companies that offer transport will offer CARGO insurance to purchase. 

Most common insurance problems in sea, rail or air transport from China

No matter how well transport is planned, there is always the risk of unforeseen problems. Damage to goods, flooding, crumpled packaging are just some of the troubles that importers can encounter. This is why it is important to have the right insurance to help minimise losses. The best choice is to take out a CARGO policy with an A clause with the widest package. 

Tip: When choosing, make sure that CARGO insurance is of the broadest A clause, which covers the most risks.

A second common problem is lack of understanding of the insurance conditions. Some companies may offer policies that appear attractive at first glance, but on closer inspection it becomes apparent that they do not offer full protection. This can lead to unpleasant surprises if problems arise. This is why it is important to read and understand the terms and conditions carefully. 

It is important that when choosing a company to carry out transport marine, rail or aviation, pay attention to its solid reputation. Freight forwarding companies establish partnerships with different insurance brokers with different approaches to the claims process. It is invaluable to be able to rely on a reliable partner who, in the event of unforeseen events, will support us in successfully obtaining funds from the insurer. In this way, we build trust in a company that not only handles transport professionally, but is also prepared to rise to the occasion in crisis situations, providing financial support in line with expectations.

Frequently Asked Questions

Is insurance compulsory for transport by rail, sea or air from China?

CARGO insurance is not in the compulsory category, but we recommend taking it out, given the low cost and significant benefits. 


Are there special types of insurance for different types of transport from China?

There are several types of insurance, but for all types of transport from China, the best option is to take out CARGO insurance. It applies to all types of transport. 


What are the most common insurance issues in shipping from China?

The most common problems with transport insurance from China are ambiguities in insurance contracts, problems with compensation and difficulties with the claims process. It is worth working with a reliable company in this field, which will provide us with good support.

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