There is a wide range of things you can do to guard the well-being of your business, for example, if you want to protect your merchandise from natural disasters you can apply warehouse and store solutions or use real-time monitoring systems. 

In addition, you can also consider hiring an insurance company, especially if you plan to expand your business internationally. A contract like this can grant you and your team financial security whether or not there is a natural disaster. 

Nowadays, it is important to be prepared for any scenario, no matter how unlikely it may seem. That is why finding an insurance company along with custom brokers in Nuevo Laredo that can offer you the best deal and benefits is essential for protecting your assets and ensuring peace of mind.

Purpose of international insurance 

Insurance is a contract between a person or a business and an insurance company in which, in exchange for a series of monthly or annual affordable payments, the company guarantees economic compensation for any damage caused by a third party or the insured. 

In cars, for example, if another driver hits for not paying attention to traffic signs, the insurance company will mediate between the insured, the authorities, and the driver. They can also provide financial compensation according to the crash’s severity, intending to cover repair costs, medical expenses, and any other damages incurred.

The same goes for your cargo; let’s say a percentage of your goods are damaged during shipping to another country, not due to lack of care in packaging but because of environmental complications, improper deconsolidation, missing cargo, etc.  

In this case, the insurance company will evaluate the situation alongside your custom brokers in Manzanillo, and cover the losses. This will alleviate the stress of handling the complexities of international shipping issues alone. 

Types of insurance for international commerce 

Many factors involved in the international trade process can fall under the protection of an insurance company.  

Learn about the most common types of insurance specialized in international commerce, and find the one that best suits your business needs.   

1.- Cargo insurance

Cargo or freight insurance focuses on protecting your cargo against any incident that may occur during the exportation and importation of goods. This includes missing cargo, damage for mishandling, collisions and fire-related incidents, natural disasters, theft, and delays for global health emergencies.      

2.- Credit insurance

It is common for businesses to have credit availability for current and loyal buyers. However, although this policy reflects well on your business, it still represents a substantial economic risk. That is why it is essential to have the support of an insurance contract in case your client fails to pay for several reasons like bankruptcy or financial difficulties.  

The insurance will not only cover non-payments for one or multiple buyers, but it can also offer debt collector services and guidance for monitoring current or even potential credit risks. 

3.- Political risk insurance

When trading from one country to another, the probability that your goods will be detained, destroyed, or prevented from entering foreign territory due to political conflicts may be low but never zero. This small percentage is reason enough for political risk insurance to exist.   

It may include protection against unfair government compensation, coverage of losses due to war events, and breach of international contracts. These efforts encourage businesses to invest in emerging markets and politically unstable regions by providing a safety net.

4.- Liability insurance

Once your cargo arrives in another country, it will be complicated to keep track of everything. Even if you hire the services of a mexican custom broker, damage allegations may happen. Whether your business is found liable or not, you will need liability insurance.  

For example, if one of your international clients claims that a product of yours has caused them health issues, the insurance will cover medical expenses and compensation, but if you are not responsible, you may still need to go to court to resolve the conflict. Fortunately, this is also a scenario that your insurance can cover. 

Additionally, in terms of legal and bodily injury coverage, liability insurance provides safeguards against claims of copyright infringement, pays for settlements, and covers the cost of any damage to third-party property caused by the insured.      

5.- Business travel insurance

Business travel insurance focuses on protecting your agents, their electronics, samples, and other resources needed to represent your business to international buyers and investors. 

In case of an unforeseen event, such as a flight cancellation, lost baggage, or a medical emergency, business travel insurance provides coverage to ensure your agents can continue their work with minimal disruption. It may also include coverage for trip interruptions, theft, or damage to important business equipment and legal assistance if needed.

Factors to consider when hiring insurance 

The partnership between your insurance company and your business not only mitigates potential risks but also enhances the resilience and efficiency of your supply chain, ultimately contributing to the smooth and successful operation of your business.

That is why it is important to be aware during negotiations that any insurance policy has certain restrictions, such as the amount of damage it can cover, the specific risks it addresses, and any exclusions that may apply, as well as extra fees for additional coverage or services. 

Understanding these limitations and add-ons may allow you to customize your insurance until it aligns with your needs and provides the necessary protection, avoiding unexpected costs or gaps in coverage.

Do you want to know more ways to protect your export and import activities? Take a quick look at our blog to find out, we upload new content each week.