Shipping insurance is an insurance that guarantees the cost of damages and losses that may arise during the transportation of a cargo from one point to another via road, sea, air or railway. The details covered by the shipping insurance vary according to the general terms and special conditions of the relevant insurance.
Shipping insurance covers both the shipping company and the person receiving the service during the transportation process. All goods and assets with tangible value are insured against certain risks with transportation insurance.
What are the Types of Transport Insurance?
Transport insurances are divided into general types according to the type of goods and the unit of transport. In general, the types of shipping insurance are examined under 4 main headings. These; Commodity Transport Insurance is divided into types such as Valuable Transport Insurance, Freight Insurance and Boat and Yacht Insurance.
Commodity Transport Insurance
In this type of insurance, the damages and losses that may be incurred while the commodity (load) is transported from one place to another are secured and it is applied to all transportation vehicles, including road, air, sea and railway. With the commodity transportation insurance, attempts are made to prevent all damages and losses that may happen to the cargo, and at the same time, it guarantees the company in this regard. Situations covered by shipping insurance also vary depending on the type of coverage. Included in this case are the following:
Total Loss Coverage: The vehicle that carries out the transportation and all the products in it are covered by the total loss coverage insurance. In other words, it comes into play when a situation occurs to the vehicle where the transportation is carried out and all the goods are lost.
Narrow Guarantee: It comes into play when partial damages to the goods during transportation are secured. In case of an accident during transportation, for example, the ship stranded, capsized, pirate raid and conflict, accident, overturning of the vehicles, collapse on the road, creek overflow, fire, etc. In such cases, when a problem occurs with the product, it is covered by the Narrow Coverage and insurance is applied.
Wide Coverage: When transportation insurance is made with a wide coverage, it covers all dangers regardless of the vehicle such as ship, truck, train or plane. In other words, when you take out a wide coverage commodity transportation insurance, your damage will be covered no matter what happens to your goods.
What are the types of transport insurance policies?
While making commodity transportation insurance, policies are applied according to the type and scope of the product: These are; It is divided into 4 as Final Policy, Temporary (Flotan/Muvakkat) Policy, Subscription Agreement and Block Subscription Agreement:
Final policy: It is a policy that is issued to inform the insurer in advance of all details regarding the shipment before shipment. In other words, all the details of the insurer regarding the transportation to be made, such as the type of goods, insurance cost, packaging type, amount, date of shipment, etc. He must know in advance and make the insurance within this information.
Flotan policy: If the exact details about the shipment are not known beforehand, a float policy is issued when it is desired to guarantee the shipments to be made in a certain period and in the transactions with letter of credit opened by the banks. The insurance company has to be aware of all the information about the shipment during the shipment of the goods. Provided that the "minimum premium" is obtained with Flotan Policy, the shipment made is guaranteed.
Subscription Agreement: With this contract, shipments to be made by enterprises for one year are guaranteed. One-time policies are issued for each shipment to be made under this contract. This contract is generally applied to companies that have high shipping capacity and make frequent shipments and companies that guarantee that they will fulfill the necessary obligations. It provides automatic coverage to the insured person up to a certain limit, depending on the type and provisions of the contract. In addition, premium refunds are provided if certain conditions are met.
Block Subscription Agreement: Although it is similar to the subscription policy, it is a type of policy that is issued annually for all the transportations to be made within a year based on the annual transportation turnover. The one-year plan is notified to the insurer in advance and the total premium is calculated for all one-year carriage. In this way, the transports are insured without any notification obligation.
What is Freight Insurance?
In freight insurance, there must be an error or negligence of the transport company in order to cover the damage incurred during transportation. If the company is found to be at fault, the company has to cover all losses. How the damage will be paid depends on the shipping company. Depending on the agreement, it may be paid to the firm by the transport company or the transport company may offer various services in return. According to the agreement made under the insurance, the damage of the goods is directly paid by the shipping company.