It is not news that the flow of cargo transported from one country to another has been increasing with every passing day. And during the course of a cargo shipment, various transportation modes are used (road, air, sea and river). Therefore, cargo owners generally buy international multimodal or intermodal insurance to protect themselves against the risks that may occur in any of the transportation modes used for the shipment of their cargo, during the entire transit, from origin to final destination.

To protect their merchandise against eventual loss and damage, cautious importers contract international transport insurance, through open or adjustable policies.

Open policy

The open policy is the type of insurance most commonly sold and recommended to importers. Under this type of insurance, the premium is charged through monthly invoices based on what was in fact imported. For instance, if there are no imports in a given month, no premium will be charged.

Adjustable policy

The adjustable policy sum insured is established with basis on a forecast of the imports to be made during the year, and the premium is charged on a lump sum basis or in predetermined installments. At the end of the policy period, the volume of imports is assessed, and the premium is adjusted accordingly.

In the case of adjustable policies, the insurers establish a minimum annual premium, and include a premium adjustment clause, whereby premium will be returned or charged to the insured, as the case may be. If the assessed value of imports is lower than the forecasted value, no amount will be returned if a minimum premium is established. However, part of the amount paid will be returned if the policy includes a specific clause for an agreed percentage, but, in no case, will it bear any proportion to the amount actually paid. In the case that the imports exceed the value specified in the policy, the insurer charges an additional premium on the value exceeding the forecasted amount.

To assist you with your planning, CredRisk Marine has made available an online calculator to enable you to determine a base-value for your International Cargo Insurance. Try it right now.