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Declared Value vs. Cargo Insurance

Some shippers operate under the misconception that declaring value to a carrier is the same as being covered by shipper's interest cargo insurance. While declaring value to a carrier is, of course, a good idea, the protection it provides is minimal. To win a claim against a carrier, the shipper must prove that the cargo was damaged in the carrier's care, custody or control. This is particularly important in instances where a loss is attributable to an “act of God.”

The difference between declared value and cargo insurance is perhaps best illustrated by examples. Consider a truck struck by lightning, resulting in total loss of the cargo. Since the trucker didn't act negligently, declared value would give the shipper no right to automatic recovery. However, a claim would be paid under all-risk cargo insurance.

Or consider a vessel, which after a few days at sea, runs into heavy weather. A large wave hits the ship and containers are washed overboard. “Heavy weather” excludes a carrier from liability for loss of cargo. But all-risk or with average cargo insurance would cover the shipper.

At Western Overseas, we do everything in our power to protect the cargo of our customers. But disasters really do happen. Contact us so that we can help you be ready.