All-Risks Coverage

In the freight industry, goods face various potential risks during transportation, such as natural disasters, theft, accidents, etc. To ensure the safety of goods, many companies purchase risk insurance to provide the broadest protection. All Risks Insurance is comprehensive insurance that covers almost all risks that may cause loss or damage to goods unless they are expressly excluded from the policy.

What is all-risk insurance?

All-risk insurance is a form of cargo insurance that provides the broadest possible protection for goods during transport. It covers almost all risks that could lead to loss or damage to the goods unless the policy explicitly lists an exclusion. Unlike named perils insurance, all-risk insurance provides more comprehensive coverage, covering common risks (such as fire, theft, and collision) and unforeseen risks (such as natural disasters, accidents, etc.).

However, it should be noted that comprehensive insurance coverage is not truly “all risks.” The policy will usually list some exclusions, such as

• natural wear and tear or inherent defects of the goods;
• war, acts of terrorism;
• nuclear accidents or radioactive contamination;
• damage caused by improper packaging or shipper mishandling;
• indirect losses caused by shipping delays.

Therefore, companies should carefully read the policy terms to understand the specific coverage and exclusions when choosing comprehensive insurance coverage.

What are the advantages of insurance coverage?

Due to its extensive coverage and flexibility, comprehensive insurance coverage is the preferred insurance solution for many companies. The following are the main advantages of comprehensive insurance coverage:

1. Comprehensive protection to reduce risks

Comprehensive insurance coverage covers most of the risks encountered during transportation, including natural disasters, theft, fire, collision, etc. This comprehensive protection provides a safety net for companies, ensuring financial compensation in the event of damaged or lost goods, thereby reducing the company’s financial risks.

2. Flexibility and customization

All-risk insurance is highly flexible, and companies can choose additional clauses or extend the scope of coverage according to their needs. For example, for high-value or unique goods (such as fragile and dangerous goods), companies can add specific clauses to ensure that the goods are adequately protected.

3. Simplified claims process

Because of the comprehensive coverage of all risks, companies do not need to prove that a loss was caused by a specific risk when filing a claim. This simplifies the claims process, reduces disputes over the type of risk, and makes claims more efficient.

4. Enhances customer trust

Insuring goods against all risks is not only in the company’s interests but also a sign of responsibility towards customers. Customers will, therefore, have more trust in the company’s transport services, which will enhance the company’s reputation and competitiveness.

5. Suitable for multiple transport modes

All-risk insurance applies to all modes of transport, including sea freight, Air freight, land transport, and multimodal transport. It provides comprehensive protection for FCL and LCL.

6. Reduces uncertainty

There are many unforeseen risks during transportation, such as extreme weather and political unrest. By covering these uncertainties, all-risk insurance provides businesses with a greater sense of security, allowing them to focus on their core business without worrying excessively about their goods’ safety.

All-risk coverage is one of the most comprehensive and flexible cargo insurance forms. Covering most transport risks provides businesses with strong protection and reduces the financial risk of loss or damage to goods. At the same time, the flexibility of all-risk coverage and simplified claims process make it the preferred insurance solution for many businesses.
However, when choosing a comprehensive insurance policy, companies should carefully read the terms to understand the specific coverage and exclusions and ensure that their goods are adequately protected. Additional terms can be used to extend the coverage scope for high-value goods or special shipping needs.

Frequently asked questions about all-risk insurance

Does all-risk insurance cover all risks?

Although all-risk insurance is comprehensive, it does not cover all risks. The policy usually lists exclusions, such as war, nuclear accidents, natural wear and tear of goods, etc.

How is the premium for all-risk insurance determined?

The premium is usually calculated based on factors such as the value of the goods, the transportation route, the type of goods, and the historical claims record. High-risk goods or routes may result in higher premiums.

Does all-risk insurance cover apply to all types of goods?

All-risk insurance covers most types of goods, but additional terms or special handling may be required for some unique goods (such as perishables and dangerous goods).

How can a claim be made if the goods are partially damaged during transportation?

In the event of partial damage to the goods, the company must provide proof of damage and relevant documents, such as shipping documents and photos, to file a claim with the insurance company.

Does all-risk insurance cover losses due to transportation delays?

Generally, all-risk insurance does not cover indirect losses such as market losses or production interruptions caused by transport delays. Businesses can consider purchasing additional delay insurance to cover such risks.

What is the claim process for complete insurance coverage?

The claim process generally involves notifying the insurance company and submitting a claim application and relevant supporting documents. The insurance company will evaluate the claim and determine the amount of compensation.