Container Insurance , different types of insurance.
Bad storage. bad weather. Inappropriate director. Many things can happen when a container is shipped from one part of the world to another. Container insurance is required to avoid billing if a container is destroyed.
Containers are an innovative invention of the 21st century. “Containerization” has grown steadily over the last few decades. Millions of containers around the world are moving with the help of ships, trucks and trailers. All of these moves make containers vulnerable to many risks. And sea transport can be unpredictable. All of these various modes of transport can lead to container damage.
Damage to the container can put the shipper in a financially difficult situation. Containers can be damaged in a variety of ways. Doors are broken, dented, heat damaged, containers fall into the sea, etc.
Who is responsible?
It can be difficult to know when a container has been damaged. Therefore, it is difficult to understand who is responsible for compensating for the damage. Many shippers overlook container insurance because they want to save money. Or because they don’t want to care about it. Uninsured freight carriers may have to pay the full amount of the container and freight in case of total loss. This is a big financial disadvantage and inconvenience.
That’s where container insurance comes in. Container insurance provides equipment owners and users with security by covering a variety of risks. Often it can easily be confused with freight insurance. Cargo insurance protects the cargo inside, while container insurance protects the equipment.
Different types of container insurance
There are many brokers on the market that provide insurance to container owners, lenders, and operators. From time to time, insurance brokers offer containers along with freight insurance.
The type of container insurance varies from insurance broker to insurance broker. The same is true for the types of damage you want to prevent.
In general, most insurance covers the following aspects:
- Physical loss and total loss
- Recovery and maintenance costs – Full Equipment Cover (FEC)
- Damage repair and lost units
- Third party responsibilities (eg chassis)
- Coverage of residual value of equipment
Container insurance may not cover certain conditions (this may vary):
- Mysterious disappearance
- Mechanical / electrical destruction
- Design / manufacturing errors
- Depreciation, inconsistent maintenance routines
The container will be inspected when it is returned to the owner. If damage is found on the container, the owner will make a cost estimate to fix the damage. This quote is then sent to the container user. The user arranges another inspection to reconfirm the charges. Then, if the user and the owner do not agree, we will negotiate a cost estimate. The charges are then settled using an insurance broker. If insurance is not part of the transaction, users face the inconvenience of paying from their pockets.
Type of container insurance
When talking about insurance in this industry, it’s hard to avoid P & I clubs. Here’s an overview of what this is and what it does. Most container insurance service providers offer two types of container insurance. Basic insurance and premium insurance. Here you can understand with an example:
Basic insurance covers the equipment from total loss. Items that cannot be repaired, such as loss at sea, mysterious disappearance, and widespread damage. Insurance is valid for one-way travel for up to 60 days from the date of pickup. Insurance will automatically renew after 60 days unless you report that the box is empty.
Premiums insurance cover all types of physical damage that a container may suffer. This includes total loss. Therefore, the premium price is slightly higher. Physical damage can occur due to ship sway, mishandling of the container by the crane lifter, thermal damage to the container, derailment of the train, etc. Insurance premiums cover all costs that exceed DPP. Insurance is valid for one-way travel for up to 60 days from the date of pickup. Insurance is renewed daily unless you report that the container is empty.
Apart from insurance, there is also a Damage Protection Plan (DPP). DPP helps supplement regular maintenance and repairs after using the container. The container supplier pays for DPP. Insurance covers higher costs than DPP. DPP is useful if you don’t want to do a damage assessment every time you lease a container. We will cover all repair costs if the negotiated DPP amount is applicable. The basic insurance cost for 20DC is $ 2.5. The premium is $ 12. The price depends on the size and type of container.