International insurance serves to cover any risk derived from a trade transaction between two or more countries. In exchange for an amount of money, a third party agrees to bear all the risks on behalf of the insured. These risks can be commercial, political, financial, unilateral termination of the merchandise trade contract, etc.
The most important insurance
Internationally, the most widely used insurance is transportation. In these cases, the insurance company is obliged to indemnify in case of damage or loss of the merchandise. Policies are contracted based on the means of transport:
- Road transport: The usual thing is that the carrier responds for the losses or damages suffered, unless it is proven that the damages come from the shipper or the recipient.
- Transportation by rail: Same liability conditions as in the previous case.
- Transportation by sea: The shipping company is responsible for the loss or damage of the goods it was transporting. Exceptions are cases of crew negligence, hidden defects on board or fire, among others.
- Transport by air: If the carrier adopted the necessary measures to avoid the damage, it will not be responsible for it. Nor if the loss has taken place due to a driving or piloting error.
In these policies there are no European regulations that regulate the compensation of the injured party, so the amount is established based on certain factors, such as the gross weight of the lost or damaged merchandise.
Other important insurance and international trade policies are:
- Export: If the importer breaches his contract or defaults, this insurance will cover the corresponding payments so that the exporter has guaranteed collection.
- Currency exchange: In case of exporting goods to a country that has a different currency of the euro, the final price can be detrimental depending on the exchange rate.
- Political risk: Political instability is one of the main factors that can negatively affect international transport, hence the importance of this policy when it comes to safely processing the transport of cargo.
These are just some of the main types of international insurance, several of these policies can be contracted simultaneously with the mixed coverage formula.