| Losses during transport occur daily. Containers shift | | | | 1,000 shipments. The probability of loss is 1.3%. |
| and fall overboard, vessels collide and capsize, cranes | | | | To determine the economic consequence associated |
| puncture containers, weather damages goods and | | | | with a loss, take the probability of loss multiplied by |
| maritime piracy continues throughout the seas. All of | | | | the average value of the shipments. |
| these situations compromise the safety of goods | | | | Example: The average value of the shipments is |
| travelling both domestically and internationally. Marine | | | | $250,000. So the economic consequence is $3,250 |
| Cargo Insurance covers the loss, damage or theft of | | | | ($250,000 x 1.3%) for each shipment that year. |
| goods while in transit. | | | | The need for marine insurance is apparent. Many |
| The direct loss is only the tip of the iceberg as the | | | | cargo insurance policy holders are not insuring their |
| indirect losses are even more drastic to your | | | | goods in the most cost effective way. The market is |
| company's bottom line. Managing the direct loss will | | | | soft, so now is the time to shop rates and compare |
| help offset the effects of the indirect losses. | | | | marine insurance providers. If you already have an |
| Determining the Probability of Loss & Economic | | | | annual policy your rates should be dropping! If you |
| Consequences | | | | insure shipment by shipment your charges should be |
| To determine the probability of loss, take the total | | | | dropping! Whether you purchase an annual Marine |
| number of shipments in one year and divide by the | | | | Cargo Insurance policy, self-insure, insure shipment by |
| number of shipments that were compromised in that | | | | shipment or purchase CIF, request a quote for an |
| 12 month period. | | | | annual policy will be very beneficial to your company |
| Example: If 13 shipments were compromised out of | | | | during these hard economic times. |