As a freight forwarder, you regard yourself as a vital middle man. You negotiate all the transportation, paperwork, and customs hurdles to ensure safe seamless transport of cargo from your shipper to his consignee. But as you know all too well, in certain situations you can also feel like you’re the middle man in a game of dodge ball.

When you arrange a pickup from a shipper you can be held liable for any damage done to the cargo by the trucking company since you provide him with your bill of lading to be filled out. And should the goods be lost in transit you can find yourself liable for the fully insured amount. Normally the transportation company would pay the claim but what if they or their insurer denies the claim?

Arranging international ocean freight can be quite complicated and open you to all kinds of situations. While not all of them are in the realm of everyday occurrences, you should know they exist. Say, for instance, you contract with a shipping company who subcontracts with a company who registers or flag their vessels in a country other than their own, a country where safety, ship conditions, and manning are unregulated and left to the discretion of the ship’s owner. What is the ship sinks? Collecting on cargo loss would be difficult or impossible. And should you pursue redress it will be time consuming. Meanwhile you have a client demanding his own redress, and delaying it will put you in poor standing. So you compensate him and hope for the best. Yes, doing due diligence might have prevented the situation in the first place, but having contingent cargo insurance in place can save the day.

Contingent cargo insurance would cover you in either of the above cases. It not only covers loss or damage, but also theft in transit as well as some of the perils peculiar to rail or ocean shipping, such as derailment or piracy. While you are not legally required to purchase it, you may find that more and more shippers, before entering into an agreement with you, are asking if you have contingent cargo insurance. Shouldn’t it be a question you are asking yourself?