Freight Insurance is the oldest form of insurance. The first known record of formal marine insurance was traced back to 1350 AD. So, the freight insurance industry is no stranger to international turbulence and disputes.
But what’s the fuss this time? Times have changed, and so have priorities.
As more and more products get imported from abroad at lower prices, the domestic industries suffer. To combat this, the current administration has been putting up tariffs on foreign goods.
These US sanctions and retaliatory tariffs from the EU and China have worried people in the freight insurance industry.
Freight insurance is written up based on several factors:
- Weather conditions and the likelihood of disasters
- The value of the actual cargo
- Health and safety considerations
Unfortunately, the coverage excludes loss caused by sanctionable activity. That’s right! If you lose your cargo to tariffs imposed on you, you cannot make a claim.
Given these conditions, freight insurers must be extra careful when writing up freight insurance for a client. They must make sure that the insured is fully aware of the risks associated with any new tariffs imposed.
Freight insurance risks attached to US trade policies are complicated and indirect. Global tariffs affect marine trade. And sadly, these effects can snowball to cause problems in the marine insurance market.
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