If you’re in the business of transporting goods, you know that accidents can happen. Cargo can be damaged or lost during transport, leading to financial losses for your company. That’s where commercial transportation insurance comes in. A recent report on openPR projects that the global commercial transportation insurance market will experience significant growth, with a projected size of US$ 171.73 billion by 2028. This represents a notable increase from the market’s size of US$ 107.77 billion in 2021, with a CAGR of 6.8%
In this article, we’ll explore why transportation insurance is essential for your business and what it covers.
What is Commercial Transportation Insurance?
Commercial transportation insurance is a type of insurance that covers goods and merchandise being transported by a business. This insurance protects against financial losses that may arise from damage, theft, or loss of cargo. Many insurance companies specialize in business transportation insurance. These agencies work with businesses to provide customized insurance policies that meet their specific needs. They may offer a range of policies, including motor truck cargo insurance, marine cargo insurance, and freight liability insurance.
Insurance agencies like Cochrane & Company are often seen assisting clients with identifying and managing risks associated with the transportation of goods, helping reduce the likelihood of accidents and other issues. This particular provider was founded in 1979 and has been involved in providing customized commercial transportation insurance.
When selecting a business transportation insurance provider, however, it is critical to examine the agency’s background and credibility. Look for a company with a proven track record of delivering dependable insurance coverage. You should also consider the agency’s financial stability, as this can impact its ability to pay claims.
Types of Commercial Transportation Insurance
There are numerous types of business transportation insurance plans available based on the type of cargo being transported and the mode of transportation employed.
1. Motor Truck Cargo Insurance
The commodities being carried by a motor carrier are covered by motor truck cargo insurance. This sort of insurance protects against cargo loss or damage caused by theft, accidents, or other unanticipated incidents.
2. Marine Cargo Insurance
Marine cargo insurance insures products being moved via water, air, or land. This insurance protects against damage or loss caused by accidents, weather-related events, or other unforeseen circumstances.
According to the latest report from GlobeNewsWire, the global marine insurance market is predicted to experience moderate growth, with a projected increase from $26.30 billion in 2021 to $27.81 billion in 2022, representing a compound annual growth rate of 5.7%. However, the recent Russia-Ukraine conflict has caused disruptions that could impede global economic recovery from COVID-19.
3. Freight Liability Insurance
Freight liability insurance covers the liability of a freight forwarder or carrier for loss or damage to cargo in their custody. This sort of insurance covers the cost of cargo damage or loss, as well as any legal expenses incurred in fighting against claims.
Why Commercial Transportation Insurance is Essential
1. Protects Against Financial Losses
Cargo is a valuable asset, and the loss or damage of goods during transport can result in significant financial losses for your business. Commercial transportation insurance can help protect against these losses and provide peace of mind knowing that your cargo is covered.
2. Helps Meet Legal Requirements
Commercial transportation insurance is often needed by legislation. In the United States, for example, motor carriers are obliged to carry a certain level of insurance in order to operate lawfully.
As stated on the official website of the Federal Motor Carrier Safety Administration (FMCSA), United States law mandates that freight companies must carry insurance coverage with a minimum limit of $750,000 to $5,000,000, depending on the type of cargo being transported.
Noncompliance with these rules may result in fines or the revocation of your operating license.
3. Provides Protection for Your Business
Accidents and unforeseen events can happen at any time, and having commercial transportation insurance can help protect your business from the financial fallout. Without insurance, your business could be liable for damages and legal fees associated with the loss of cargo.
Conclusion
In conclusion, commercial transportation insurance is an essential aspect of any business involved in the transportation of goods. It provides protection against financial losses due to damage, theft, or loss of cargo, as well as legal liabilities that may arise from such incidents. It also helps businesses meet legal requirements, ensuring that they can operate legally without facing fines or penalties.
As the global market for transportation insurance continues to grow, it is important for businesses to work with reputable insurance agencies that can provide customized policies that meet their specific needs. By doing so, they can secure their cargo and protect their bottom line.
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