Break bulk shipping is often used in large construction projects or heavy industry, where even a small mistake can mean enormous losses.
**1. High Loading & Unloading Risk**
Break bulk cargo is not in securely protected containers; it requires crane lifting piece by piece. The chances of “impact,” “dropping,” or “damage during lifting” are very high. Insurance covers damage occurring during this most vulnerable stage.
**2. Complex Lashing & Securing**
For irregularly shaped and heavy cargo, if the lashing is not secure enough, the cargo may slide and collide with the hull or other cargo in rough seas, causing damage. Insurance helps bear the risk in case of calculation or securing errors due to unforeseen circumstances.
**3. Exposure to Elements**
Some break bulk cargo may be placed on the ship’s deck, exposing it to salt spray, rain, or sunlight throughout the journey, which can cause rust or deterioration. All-risk insurance is therefore essential for this type of product.
4. High Concentration of Value
Break bulk goods are often specialized machinery or equipment custom-made for a specific project. If damaged, those parts may not be replaceable in a short time. Insurance not only compensates for the cost of the goods but also helps mitigate the financial impact of delays.
Why do businesses “need” this type of insurance?
- Protection against project failure: If the factory’s main machinery is damaged during transport, insurance will help manage the cost of repairs or remanufacturing as quickly as possible.
- General Average Coverage: As with all types of ships, in the event of an emergency at sea requiring the sacrifice of assets to preserve the ship, the owner of the break bulk goods must share the average cost.
- Incoterms: In the sale of heavy machinery… Such contracts often mandate insurance coverage that extends to the final destination.
“Break bulk products are the heart of infrastructure; therefore, insurance is not just about protecting assets, but ensuring the success of the project.”