What is bond transit insurance?
Band transit insurance is a type of insurance designed specifically for cargo that is being transported from one country to another and is in transit. This insurance policy is usually used for international transportation of goods and its purpose is to provide security and coverage against possible risks and damages that may occur to the cargo during the transit route. This insurance covers all risks related to cargo during international trips and allows you to get your goods back if they are damaged in any way during the transit. Among the factors covered by transit insurance are the following:
- Physical damage such as impact, breakage or spoilage of the goods due to accidents or weather conditions
- Theft of goods or damage to the cargo
- During loading, unloading or during transportation
- Natural disasters such as floods, storms or earthquakes
Types of Band Transit Insurance
Transit insurance is of particular importance in the international transportation industry and ensures the security of shipments during export, import and transit of goods. According to the specific characteristics and needs of each transportation, there are different types of this insurance that can cover various possible risks and dangers. Below, we will introduce the different types of transit insurance and its applications.
Band transit insurance for imported goods
Import transit insurance is for goods that are imported into the country. In fact, one of the necessary documents for importing and clearing goods is having a valid transit insurance. This insurance helps the importer to avoid unexpected costs in the event of possible accidents and losses such as damage to the goods en route, theft or destruction.
Bond transit insurance for exported goods
This transit insurance is as important for exported goods as it is for imported goods. Exporters need this type of insurance to protect their goods from potential risks such as physical damage, theft, or unforeseen events during transportation. By covering various risks during export, this insurance policy provides exporters with the assurance that in the event of damage, the insurance company will compensate for the damage according to the terms specified in the insurance policy.
What obligations does the transit bill of lading have for the security of goods?
Transit bill of lading insurance has various coverages and obligations to reduce the losses incurred by the owner of the goods, which you can choose according to the type of goods and cargo and the conditions required for transportation. In this section, we have briefly explained the obligations that insurance companies offer for this type of insurance so that you have more information on this subject.
Total Loss Obligation
Some unexpected events and incidents such as fire, ship sinking, severe accidents, etc. may cause the complete loss of the cargo so that it is completely damaged and can no longer be used or recovered. One of the obligations of transit bill of lading insurance is the payment of damages incurred against the complete loss of the cargo, in which all costs and losses of the loss of the goods during transportation will be paid to the owner of the goods according to the terms and obligations stated in the insurance contract.
Clause C Commitment
Clause C commitment is one of the important coverages in transit insurance, which, in addition to compensating for damages related to the complete loss of cargo, covers additional risks and incidents that may occur during the transportation of goods. In this type of coverage, if your goods are damaged or destroyed due to incidents such as fire, explosion, emergency unloading in ports, cargo dumping at sea, ship running aground or sinking, or similar incidents, the insurance company will be responsible for paying you the damages. This commitment assures you that you have insured your goods against unforeseen risks during transportation.
Clause B Commitment
Clause B commitment includes additional coverages from transit insurance that are intended to further protect your goods against unexpected incidents and natural disasters. In this coverage, the insurance company undertakes to compensate for the losses caused by events such as volcanoes, earthquakes, or lightning that lead to the loss or damage of cargo. In addition, some special situations and other conditions that are included in this commitment are also included in this coverage. Clause B commitment gives you the assurance that your goods will be fully protected against natural disasters and other unforeseen events.
The events and cases that are included in Commitment B include:
- Theft and theft of goods
- Theft of goods
- Theft of goods from the ship’s deck into the sea
- Breakage and damage to cargo
- Damage of goods
- Seawater entering the ship
Clause A Commitment
Clause A commitment is the most complete type of transit bill of lading insurance, covering all the conditions and risks foreseen in Clauses B and C. In addition to compensating for the losses mentioned in Clauses B and C, this insurance coverage also addresses more specific and complex cases. Specifically, if your goods are damaged as a result of deliberate destruction, strike or war, or suffer losses due to delay in reaching their destination, Clause A insurance will compensate for the loss. Also, damage caused by decay, weight loss or damage during transit is also covered by this insurance coverage. This insurance commitment assures you that the losses will be paid even when the goods are not properly packaged.
The most important cases and conditions that force Clause A insurance to pay damages are as follows.
- Deliberate spoilage and damage of goods
- Strikes or wars between countries
- Damage caused by delays and late arrival of goods at their destination
- Damage during transit, decay or weight loss of goods
- Damage due to improper packaging
Summary
Transit bin insurance is designed to cover potential risks and losses during transit and can include physical damage to goods, theft, natural disasters, and problems related to loading or unloading. Different types of transit bin insurance, including insurance for imported and exported goods, borderless insurance, combined transport insurance, etc., are specifically designed for different international transportation needs. Overall, transit bin insurance is a suitable solution for ensuring the safety of goods in international routes and provides traders and exporters with the assurance that in the event of unexpected events, losses will be compensated according to the contract and specified obligations.