What is the purpose of freight coverage?

The purpose of freight coverage is to protect against unpaid shipping fees. This type of coverage is designed to safeguard the interested party—usually a shipping company or freight forwarder—from losses incurred when the freight charges are not paid by the customer or consignee.

In the shipping industry, there is often a significant investment involved in transporting goods, and unpaid fees can result in financial losses. Freight coverage offers a safety net to ensure that these costs are recouped, allowing businesses to manage their risks more effectively when shipping goods.

Other options such as covering legal liabilities, ensuring vessel repair costs, or providing coverage for personal injury claims serve different functions and do not fall under the scope of freight coverage. Understanding these distinctions is key to effectively navigating the complexities of shipping and freight insurance.