lilypadfrog
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LSDefine
Simple English definitions for legal terms
cargo insurance
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A quick definition of cargo insurance:
Cargo insurance is a type of insurance that protects businesses and individuals who transport goods. It covers damages that may occur during transportation, whether it's the fault of the policyholder or an outside shipping provider. The coverage can vary, but it can be very important because the cost of damages can be much higher than someone's legal liability. Cargo insurance can be purchased for different transportation methods like marine cargo, air freight, and ground transportation.
A more thorough explanation:
Cargo insurance, also known as shipping or freight insurance, is a type of insurance that provides coverage for goods that are damaged during transportation. This insurance is important for businesses and individuals who frequently transport goods.
The coverage provided by cargo insurance can vary greatly. Some policies may only cover a specific amount of damage, while others may be more extensive and cover third-party damages, such as environmental damage caused by cargo spills.
Examples of transportation methods that can be covered by cargo insurance include marine cargo, air freight, and ground transportation.
For instance, if a company ships a large quantity of goods by sea and the cargo is damaged during the voyage, the cargo insurance policy would cover the cost of the damage. Similarly, if a truck carrying goods is involved in an accident and the cargo is damaged, the cargo insurance policy would cover the cost of the damage.
Cargo insurance is important because even if someone else is legally liable for the damage, their liability may not cover the full cost of the cargo. By having cargo insurance, businesses and individuals can protect themselves from financial losses due to damaged goods during transportation.