What to consider when you are importing or exporting your goods
Whatever happens your cargo (whether selling or purchasing) should not be travelling uninsured unless it’s a calculated risk that you have thought through as part of your financial planning and overall strategy. It is not a good idea, as goods in transit may face any number of unforeseen fates. Either you should insure or your customer should demonstrate that they have insured the goods.
Cargo or Goods In Transit insurance can assist with this, it is the method used in protecting goods/products from physical damage or theft whilst being transported within the UK or overseas by road, rail, air or water. In fact, insuring these goods ensures that the value of them are protected against potential losses which may occur during transportation.
- theft whilst in transit
- damage caused by perils during transit
- loss whilst in transit
- damage caused during transit
- shipment delay
The amount of the coverage should carefully be evaluated:
– buyers will be typically insured for the value of the goods at invoice cost, plus any freight charge, plus an advance or around 10% to 20% for shipping expenses and unexpected expenses;
– sellers should make sure their profit is included in the covered invoice costs, and evaluate an advance valuation including such variables as taxes and duties.
So ensuring paperwork and invoices are accurate and kept is vital.
To help avoid potential issues when importing or exporting, we highly recommend that the following things are considered ahead of any shipping:
- Who is responsible for insuring the goods—the buyer or the seller?
- When does the title to the goods transfer from seller to buyer?
- Is your product remaining within the UK or going to another country?
- If the transportation of the product involves another country what are their requirements for cover for the items (for example the USA has different laws to Europe and therefore you should ensure you understand where the products are going to and from)