What is freight coverage?

Freight coverage is a type of insurance that specifically protects the vessel owner or operator against the risk of not receiving payment for freight charges. This form of coverage is crucial in the shipping industry because it ensures that if a shipment is transported but the recipient does not pay for the freight, the vessel operator will still receive compensation for the transportation provided. By having freight coverage, the financial stability of the vessel owner is safeguarded against potential losses from unpaid shipping fees. This type of insurance plays an essential role in maritime operations, as it allows vessel owners to mitigate the risks associated with the collectibility of freight charges after delivering cargo.

The other options involve different aspects of marine insurance, focusing respectively on protecting vessels against physical damages or losses rather than on the specific financial aspect covered by freight insurance.