CMR or CARGO insurance? Which one do you need?

For those working in freight transport and logistics, it is essential to know not only the importance of insurance but also the type of insurance they need. It is not only the vehicles (tractor units and trailers or semi-trailers) that are insured. There are also two types of policy for the goods carried: CMR insurance or CARGO insurance.

CMR or CARGO insurance?

CARGO insurance is often confused with CMR insurance in road transport.

Even though they cover the risks of a domestic or international goods transport, we need to know that the beneficiaries are different.

If we look at the CMR insurance policy, the final beneficiary is the consignee, as owner of the goods. The insured is the carrier, who is not the owner of the goods and whose liability during the transport is insured.

In the case of CARGO-type insurance, the beneficiary is the owner of the goods, and it is the owner's goods that are insured while the transport is being carried out.

Once we have understood the differences between them, we also know which one to choose, so let's find out more!

CMR insurance – the carrier's civil liability

The CMR insurance policy is intended for road freight transport carried out under transport service contracts with road vehicles registered in Romania.

In essence, the CMR policy covers damage caused to the goods carried through the fault of the carrier, who is not also the owner of the goods. It covers events that occur when both the place of loading and the place of unloading are on Romanian territory or are in different countries.

The condition is that at least one of them is a party to the Convention on the Contract for the International Carriage of Goods by Road (CMR).

In other words, the covered risks provided for in the CMR Convention and taken over into insurance contracts are:

• damage
• loss
• delay in delivery
• losses caused by a vehicle breakdown
• costs of salvaging the goods, storage costs, legal costs, etc.

Are there also additional clauses that can be taken out? The answer is yes.

These include:

• theft
• losses for goods carried in refrigerated vehicles
• losses caused by handling or by loading and unloading
• the clause for containers
• the clause for insuring the tractor unit (as a rule, CMR insures the trailers)
• transport of vehicles or perishable goods.

CARGO insurance – protecting goods in transit

A CARGO-type policy therefore refers to the insurance of goods during transport and during the transhipment, loading or unloading of the goods.

Under this policy you can insure your own goods (regardless of how they are transported – by road, sea or air, with your own or hired vehicles) or the goods of the customers for whose benefit the transport service is performed.

That is why this type of insurance is ideal for companies that carry out transport frequently, regardless of the value of the goods delivered.

Here are some of the reasons why CARGO insurance is taken out:

• banks require this policy if the goods are being sold or purchased under a letter of credit
• legislation and transport conventions include limitations that can reduce compensation to a certain amount per kilogram, so the customer may be unable to recover the loss in full
• CARGO insurance provides cover for the full value of the goods
• under the INCOTERMS terms CIF and CIP

Honexpres supports you in choosing your insurance

CARGO-type insurance can be taken out especially if your company's business involves numerous goods shipments to and from abroad. It is valid for all modes of goods transport: land, air, sea or combined. Nevertheless, CMR insurance is the one preferred by most carriers.

Even if the overall value of the goods carried is small, in the event of damage to a large shipment the financial loss suffered by your company will also be on a large scale.

In addition to the complete services offered as a freight forwarder, Honexpres can help you make the right choice, suited to your needs, when it comes to the type of insurance.

Still not sure whether to choose CMR or CARGO insurance?

Contact us and we will take care of everything you need in order to choose!