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Glossary of Terms

Glossary of Logistics Insurance Terms

Terms you should be familiar with when searching for your insurance solution.

Act of God

Refers to a natural event non-related to human activity, for example: earthquake, storm/hurricane, and flood.


All-Risk Cargo Insurance

All-Risk coverage is the most comprehensive type of insurance made to protect your commodities against loss and damage. 


Application Programming Interface (API)

Refers to a technical mechanism which allows two individual software components to communicate with one another.

Redkik integrates its software to a booking platform with an API integration to enable one-click coverage.


Artificial Intelligence (AI)

System that iteratively improves itself through the data it collects. In insurance, artificial intelligence is used to offer more accurate risk profiles, which allows for more accurate pricing.

Redkik’s software utilizes AI to generate dynamic quotes based on multiple risk factors.


Bill of Lading (BoL)

A document with transportation information regarding the agreed terms and other conditions between the shipper and the carrier of the cargo. 


Cargo

The materials or items being transported. Also referred to as goods and commodities.


Cargo Insurance

Protects the value of cargo against loss, damage, and delay whilst it is in transit.


Carrier

A Company or an Individual responsible for the transportation of shipments on the behalf of another party, for example a freight forwarder or a transport intermediary.


Carrier Liability

Determines a carrier’s liability for the goods they are shipping in the event of damage, loss, and delay. The extent of this coverage depends on, for example, the commodity type and packaging of the shipped goods, and other factors. Carrier’s liability is still always limited, and it has not been made to protect the shipper’s business – so always make sure you are properly covered. 


Certificate of Insurance

The document which states that the insurer has created a policy for the cargo owner, and it is proof of its validation and current effect.


Commodity

A valuable article, resource, or material of commerce which is being transported.


Concealed Damage

It means the damage sustained by the goods during transit but was only discovered after the delivery was made.


Container

Refers to a type of receptacle in which the cargo is transported throughout the journey between different forms of transport. Most commonly, the container will be made of steel and the dimensions will vary according to the type of commodity being transported in them.


Conveyance

The event that occurs when the cargo owner transfers the shipment to the forwarder and with it the legal responsibility of taking it to its destination as agreed in a previously made agreement. 


Deductible

Part of an insurance claim that the policy holder has to pay.


Door-to-Door 

This term is used to mean that the cargo will be taken right from the place of origin to its destination, for example, from the manufacturers factory directly to the retailer’s warehouse.

The insurance offered by the leading underwriters via Redkik’s solution includes door-to-door coverage.


Direct Value and Insurable Value

Direct value is another way of saying Gross Value, and it’s the exact price of a cargo or shipment. 

Insurable Value is then the addition of the direct value plus shipping cost plus 10% of their sum.


Embedded Insurance

Real-time combination of insurance coverage to a service or product that is being purchased which speeds up the combined process and increases convenience. Redkik offers a solution which can be fully embedded into existing booking platforms without any re-directs to external portals or websites.


Freight Brokerage

An intermediary which provides a service to allocate shipments with fittable and available transportation providers. 


Freight Forwarder

A Freight Forwarder, or a Transport Intermediary is a company that provides the service of transporting goods on the behalf of other companies and to which the legal responsibility of the goods is transferred while en-route.


Gap & Spike Insurance

Additional coverage that can be purchased to cover the amount not covered by, for example, an annual insurance policy. If you are shipping a shipment worth $700,000, and your current policy only covers up-to $500,000, your risk exposure is $200,000 which can be covered with gap or spike insurance.


General Average

A principle of maritime law where all involved stakeholders in a marine shipment (i.e. everyone who’s cargo is on the same cargo ship) proportionately share any losses that are a result of a voluntary sacrifice of part of the ship or cargo made to save the whole in the event of an emergency.


INCOTERMS 

INCOTERMS – or International Commercial Terms – are essential international terms of trade that govern the costs, risks, and responsibilities between buyers and sellers. For transportation, the terms define which party is responsible for the transported goods on each stage of the delivery.


Intermodal (IMDL)

If the transportation of freight requires more than one mode of transport (e.g. road and ocean) the transportation is considered an intermodal shipment.


LTL Shipping

Less-than-truckload (LTL) freight shipments are used for the transportation of smaller shipments, which don’t take up the entire trailer to move. The shipper pays only for the portion their goods occupy, while the carrier can take other shipments to fill the unoccupied space. This generally lowers the cost of transportation per shipper.


Machine Learning

System that is able to learn and adapt without human touch, by utilising algorithms and statistical models to analyse and draw conclusions from patterns.

In insurance machine learning is used to offer accurate and dynamic pricing for individual shipments based on historical data. Redkik’s system uses machine learning and data from multiple sources to offer the most accurate pricing.


Managing General Agent (MGA)

A specialized insurance agent that has been granted underwiriting authority by an insurer. Usually MGA’s are tied to only one insurance partner, meaning that their flexibility is limited. Redkik is not an MGA which allows us to work with multiple underwriters to reach maximum flexibility for our users.


Modes of Transportation

The type of transportation will determine the vehicle used for transport, as well as the requirements and limitations that the cargo will be subjected to. Modes of transportation consist of road, rail, sea, and air. The term land transportation is also sometimes used when referring to road and rail.

Redkik’s software allows all modes of transportation to be covered by the leading insurance providers.


Per-Load Cargo Insurance

Per-load, also referred to as per-shipment or pay-as-you-go, cargo insurance refers to coverage that is purchased individually for each shipment, instead of the traditional annual coverage that is purchased once a year.

Traditionally per-load coverage has been seen as inefficient and expensive. Redkik’s vision is to modernise the space of per-load coverage and make it the industry standard with accurate quotes designed to save time and money. Instead of acquiring annual coverage which is inflexible and based on annual estimates, you can now cover shipments flexibly and affordably.


Trade Lane

The route to be used for delivery, this is, the roads and locations the cargo can go through. This may be limited to international activity, weather, or type of transportation.


Transportation Risk

Shipments face vast risks in all stages of the transportation. These include, but are not limited to, theft, delay due to strikes or port capacity, Acts of God, sea conditions, and accidents loading or unloading cargo. Understanding risks in each stage of the shipment is crucial for risk management, and so is properly covering each shipment.


Reefer Shipments

The term ‘reefer’ is used in the logistics industry to refer to refrigerated commodities or transportation methods, also known as temperature-controlled shipments.

Typically a refrigerated shipment is required for perishable goods such as food items and temperature-controlled pharmaceutical products which need to be kept cool during transportation.


Shipper

The individual or company who owns the cargo being transported. In cargo insurance, this party is called the policy holder.


Shippers Interest Insurance

Shippers Interest Insurance has been made to protect the business of the cargo owner with a broader protection against damage, loss, and delays for their shipments. Learn more about the benefits of Shippers Interest Insurance:


Subrogation

In the event of an accident that wasn’t your fault, subrogation is the process which allows an insurer to recover the losses paid to the insured party, including a potential deductible, from the party at-fault.