Project Cargo Insurance for Heavy and Oversized Goods

• Project cargo insurance is a subcategory of marine insurance that covers heavy, oversized and high-value goods.
• It covers complex logistics requirements, including multimodal transportation, special shipment containers and multiple journey legs.
• Every cargo insurance policy can be customised to fit specific contract requirements for end-to-end risk protection.
• Coverage features include all-risk coverage, cover for handling, loading and unloading, temporary storage and contractual liabilities.
• Certain risks and expenses, including improper packaging, natural decay or deterioration and war risks, are not covered.
• Finding the right project cargo insurance policy requires researching project-specific needs and contractual requirements and comparing multiple plans.

Project cargo insurance is a type of marine insurance plan that covers over-dimensional, heavy and uniquely expensive cargo. It is designed for equipment and goods, such as wind turbines, plant equipment, generators, industrial modules, infrastructure components, heavy machinery, etc., that do not fit in a single transport vehicle and require specialised handling.

Standard marine insurance plans only cover cargo transported in standard containers and do not cover multimodal logistics split over multiple vehicles and shipments. Project insurance plans provide financial protection to multiple transport legs, extended to loading, unloading, transportation, storage and other operations. They also offer a higher sum insured required for large-scale projects.

The coverage offered by project cargo insurance is not restricted by size, weight or value and covers multiple carriers, breakbulk and multimodal shipments. It’s specifically designed for industries such as construction, infrastructure development and manufacturing, protecting heavy and valuable cargo.

Read Also: Special Cargo Insurance Policy

Project cargo insurance is designed to address complex transportation and logistics risks that standard marine insurance plans do not cover. Know the top reasons why project cargo insurance for heavy goods is highly recommended:

1. Coverage for Complex Logistics: The logistics of transporting oversized and specialised cargo are complex and require multiple types of vehicles, containers, multiple trips and service providers. Standard marine insurance does not cover such needs, making project insurance necessary.

2. Substantial Financial Protection: Heavy machinery, industrial equipment and bulk shipments are significant investments. Their value is not fully covered by carrier liability and cargo insurance, unlike project cargo insurance coverage, which is based on replacement and reinstatement value.

3. Supports the Entire Project: Project insurance plans are structured to provide end-to-end coverage for the entire project. They provide tailored coverage based on a project’s needs, covering all eligible risks from the origin factory to the project site.

4. Compliance Support: Getting project cargo insurance ensures compliance with both domestic and international shipping norms. These plans often provide support for documentation, cargo schedules and survey requirements, ensuring your project meets regulatory standards.

Here are the top features and benefits of project insurance for heavy and oversized cargo:

• Covers a Wide Variety of Risks: Project insurance policies cover shipment delays, storage-in-transit, installation risks, lifting and unloading risks, and more. Some plans offer all-risk coverage, the broadest available for marine policies.

• Customisable Coverage: Every cargo insurance policy is tailored to specific requirements stated in sales contracts. The cover can be structured to fit your equipment, transit plan, load handling plan and port arrangements.

• Multimodal Transit Coverage: Project insurance covers specialised shipments, including breakbulk, roll-on/roll-off (RORO), flat-rack containers, open-top containers and heavy cargo vessels. It also covers multiple vessels, journey legs, routes and ports.

• End-to-End Risk Protection: Project cargo insurance plans are personalised to cover route-specific risks from the factory gate to the final delivery site. It covers everything from transhipment delays, port handling and heavy-lift operations to installation risks and storage in transit.

The coverage offered by project cargo insurance is highly customisable and varies across different plans. Here are the common inclusions and exclusions:

What Does Project Cargo Insurance Cover?

• Accidental Loss or Damage: Covers physical loss or damage from various perils, including accidents, collisions, fire, water leakage and acts of piracy.
• All-Risk Coverage: Some plans offer the broadest protection for any risks other than listed exclusions.
• Heavy-Lift and Craneage Risks: Covers handling, lifting and loading risks related to heavy and oversized cargo.
• Multimodal Transit: Coverage applies to multiple carriers, vehicles and vessels across ocean, rail, road and inland waterways used for complex deliveries.
• Bodily Injuries and Property Damage: Covers third-party claims by dock workers, port workers and equipment handlers.
• Contractual Liabilities: Some plans may cover contractual obligations not covered by regular cargo insurance.
• Storage Expenses: Optional cover for holding cargo in warehouses, laydown yards or on-site storage facilities.
• Carrier Liability Gaps: Wherever the carrier does not cover insured risks, project insurance fills the gap.

What Does Project Cargo Insurance Not Cover?

• Improper Packaging: These insurance plans do not cover improper packaging and poorly prepared cargo.
• Natural Deterioration: Cargo that spoils, decays, leaks, or deteriorates due to its inherent nature is usually not covered.
• Consequential Loss: Indirect or consequential loss that happens outside of insured events; for example, damage caused by corrosion of a container after seawater leakage.
• War and War-like Operations: The war exclusion clause makes the insurance non-applicable to damage from war, terrorist strikes, civil war and other violent acts.

Also Read: What Does Shipping Insurance Cover

Check the differences between project cargo and marine insurance in the table below:

Both marine cargo policy insurance and project cargo insurance provide financial protection to your cargo during transit. Marine policies are more cost-effective and offer adequate protection to regular cargo that fits a standard shipping container. Project cargo insurance is better for heavy, oversized and very expensive shipments that require specialised handling.

Consider the following factors to choose the right project cargo insurance for your unique needs:

• Project-Specific Needs: Review the requirements of your project, including size, weight and dimensions of your cargo, special handling requirements and transportation route, among others.
• Legal and Contractual Terms: Go through the fine print of your service contract and financing terms. These may mention insurance requirements, including minimum liability, coverage requirements, policy formats and named beneficiaries.
• Full Value of Shipment: Calculate every cost, including freight charges, handling costs, labour, rent for heavy machinery, duties and potential liabilities. This lets you find an adequate sum insured.
• Lifting and Loading Coverage: Lifting, loading and unloading operations are major risk points. Ensure your project cargo insurance for oversized goods covers heavy machinery damage, mishandling risks and loading operations.
• Policy Exclusions: Every policy, including all-risk plans, has some exclusions. Check if your chosen plan covers or excludes mechanical failure, natural events, erection and commissioning risks, and other important risks.
• Insurer’s Claim Support: Review the insurance provider’s claim process, Claim Settlement Ratio (CSR) and customer support quality. Choose a reputable insurer that provides high-quality and reliable services.

Also Read: Things to Ask Before Buying Marine Insurance

Transporting heavy and oversized cargo comes with unique challenges, including specialised handling, transportation, regulatory requirements and financial risks. A project cargo insurance policy is designed to cover multimodal transport, handling, loading, unloading, lashing and contractual obligations. Choose the right plan after thoroughly comparing your options and conducting a pre-shipment survey.

For standard shipments, a regular marine insurance policy may be a better choice. TATA AIG’s Marine Insurance covers both domestic and international shipments with tailored marine insurance coverage for different cargo and transportation requirements. Explore your options and choose a policy suited to your business needs.