How do you negotiate insurance contracts with carriers and freight forwarders?

1 Know your risks

The first step to negotiate insurance contracts is to identify and assess the risks involved in your import/export operations. Different modes of transport, routes, destinations, and types of goods can expose your cargo to different hazards, such as weather, accidents, piracy, customs, or political instability. You need to evaluate the probability and impact of these risks on your business and decide how much insurance you need and what kind of coverage you want. For example, you may want to consider all-risk insurance, which covers any loss or damage from external causes, or named-peril insurance, which covers only specific risks listed in the policy.

3 Negotiate the terms

The third step to negotiate insurance contracts is to negotiate the terms and conditions of the policy with your chosen provider. You need to clarify the scope of coverage, the amount of compensation, the duration of the policy, the exclusions and limitations, the claims procedure, and the dispute resolution mechanism. You also need to review the policy wording carefully and look for any ambiguous or unfavorable clauses that may affect your rights or obligations. You should negotiate for the best possible terms that suit your needs and expectations, and avoid any hidden fees or charges.

4 Check the documents

The fourth step to negotiate insurance contracts is to check the documents and certificates related to the insurance policy. You need to ensure that the documents are accurate, complete, and consistent with the negotiated terms. You also need to verify the validity and authenticity of the documents and certificates, and check for any errors or discrepancies that may cause problems later. You should keep copies of all the documents and certificates for your records and reference.

5 Monitor the performance

The fifth step to negotiate insurance contracts is to monitor the performance of the insurance provider and the policy. You need to keep track of the status and condition of your cargo during transit, and report any incidents or issues that may affect the insurance coverage or claim. You also need to communicate with the insurance provider regularly and update them on any changes or developments that may affect the policy. You should evaluate the service quality and satisfaction of the insurance provider and the policy, and provide feedback or suggestions for improvement.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?