Protecting Your Packages: Why Is Insurance Vital For Shipping?

Protecting Your Packages: Why Is Insurance Vital For Shipping?

Published at 1 August, 2021 - 9:53 am by


When you are sending packages through international shipping, it is necessary that you take all the relevant measures to keep them safe. While packing tools such as bubble wrap and styrofoam peanuts can help keep fragile items secure without any dent or breakage, it may not be enough in unexpected situations. In such circumstances, there may be either severe damage or worse, a total loss of goods. Thus, to ensure that you do not have to undergo significant financial stress, it is vital that you purchase insurance. We will examine why it is so crucial in this article.


Is insurance necessary by law?

You must first know that most countries do not legally require senders to have insurance for shipped goods (also known as cargo insurance). You can send a package from anywhere in the UAE without incurring insurance charges or being instructed to obtain it. However, you do have the choice to purchase it from your shipping company before sending your items. 

Those who choose not to purchase it do mainly for one of two reasons:

  1. The cost of insurance is significantly higher than the value of the goods themselves.
  2. They believe that they will obtain compensation from others in the shipping process as they are more likely to have insurance coverage. 

While the former is perfectly valid. The latter does not apply to all cases. Furthermore, if you do receive any compensation, it will be significantly less than the actual cost of your goods, especially if the items being shipped are valuable. Therefore, while cargo insurance is not legally required by law, it would be a wise investment depending on your shipment.


Why should you purchase cargo insurance?

You can obtain compensation no matter where the damage took place.

To make a claim against a person, you need to have evidence that they damaged the item. Given there are several parties involved in the shipping process, from shipping companies, carriers, customs, storage, and couriers, it can be difficult to pinpoint where the damage occurred. If a person can contest your claim successfully, then you will be unable to obtain compensation. However, through cargo insurance, you will be able to receive a payout in nearly all situations.

You will be able to recoup the loss better.

The insurance that domestic or international shipping companies obtain has liability limits overseen by government regulations. Therefore, even if you can make a successful claim, the payout will not reflect the value of your goods, especially if they are considered valuable. Generally, the payout will either be the actual value of the good or the maximum limit set, whichever one is lower. So if your cargo was worth more than the limit, then you will make a significant loss and will have to bear the rest of the damage by yourself. If you purchase insurance, then the remaining amount will be covered by the insurance provider.

It helps you provide a good service to customers even if products are damaged.

Suppose your shipment is for commercial purposes and intended to be sent to customers. By purchasing cargo insurance, you can still provide good service even if the items were damaged. If they have already made payments, you can refund the amount as insurance will help you recover the costs or send them a new shipment to make up for it.


Final Words

Cargo insurance can be immensely beneficial regardless of whether you are sending items for personal or commercial purposes. They can help you recuperate any damage cost and ensure that you are covered in most situations. Therefore, you will not have to bear the financial burden of any cargo problem alone. There are various plans available for purchase at our shipping company in Dubai, and our staff can help you choose the best one that will suit your shipment.

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