Reading cargo policies does not normally top our clients list of “things to do”. They trust me or another one of our agents to provide them with the details they need in order to select the proper cargo policy to meet their business’ needs. But are you aware of just how much coverage can vary from policy to policy? Having some familiarity with common coverage exclusions and enhancements can be very helpful, since the needs of your operation can and will change throughout the lifetime of a policy.
It may be helpful first to know that each insurance company has the opportunity to file their own version of a cargo policy. Each of these policies can contain any number of unique exclusions and/or enhancements. Following are just a few examples of unique commodity exclusions that might exist in any number of cargo policies: furs, garments, electronics, eggs, fresh flowers, seafood, silk, jewelry, pharmaceuticals, cotton ginned within 72 hours, alcohol and tobacco.
Policies may also exclude coverage for certain types of losses, such as those arising from mechanical breakdown of the refrigeration unit (including or excluding driver error) or dampness, rust or wetness. And many will not provide coverage for niche cargo exposures such as autos, yachts, boats, household goods, motor homes and RVs, livestock and operations as a freight brokers or freight forwarders.
Some other common coverage differences include a co-insurance clause (where you are penalized if you under value your cargo), no coverage for newly acquired or substitution vehicles unless they are immediately reported to the insurance company and no cargo coverage if the cargo is loaded on a trailer that is not attached to a tractor at the time of the loss.
Further consideration should be given to those additional expenses some insurance companies will provide payment for, above and beyond the policy limits. Examples include the costs to clean up debris, pollutant clean up and removal, payments to help reduce the loss, coverage for extra expenses to get the freight reloaded and earned freight reimbursement (i.e. reimbursement for the miles you would have invoiced from pick-up to the point of loss that your client likely will not be paying you for.)
With so much to consider it’s no wonder we often labor the details of your cargo needs and spend so much time reviewing the details of our proposed cargo coverage. Do you have questions about your current cargo policy and whether any of the above referenced exclusions or enhancements apply? Call our office today at (800) 596-TRUCK (8782) to request a policy review. All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented.