By Jennifer Chang    Photo： Tom Fisk

International and domestic transportation pose significant challenges for all businesses. Whether it is air and sea transport, trucking, or multimodal transport, minimizing risks is essential.

Cargo insurance is an integral part of risk management, offering a variety of insurance options. Also known as goods insurance, cargo insurance is a form of insurance designed to protect the value of goods from loss or damage during transportation. In the event of accidents, theft, loss of goods, natural disasters, or adverse weather conditions during the transportation process, cargo insurance provides financial compensation to the owner of the goods.

During the winter and related adverse weather conditions, the importance of cargo insurance to businesses is paramount. It cannot be overstated that adverse weather poses significant risks to the transportation of goods. Snowstorms, icy roads, and extreme temperatures can lead to accidents, delays, and cargo damage. Furthermore, cargo transported during winter is susceptible to various hazards such as freezing and water damage, and temperature-sensitive goods are also at risk. In addition to physical damage, adverse weather conditions and political issues can disrupt routes and create logistical challenges.

The recent Red Sea crisis is a prime example of the need for cargo insurance. Due to attacks, shippers are rerouting their cargo via the Cape of Good Hope, leading to delays of approximately 20 days. This not only increases transportation costs but also brings potential risks of cargo loss and damage. In such a situation, insurance could have helped some shippers offset these costs.

Due to challenging weather conditions and the ongoing risk of unexpected emergencies, various types of goods may encounter different risks. When faced with numerous risks during the transportation process, choosing appropriate cargo insurance can provide economic protection and risk management for businesses, ensuring the safe arrival of goods at their destination.

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