For all shipments that exceed $2,500, a customs or importation bond is required. This bond is nothing more than a contract that will insure that importers concede to performing their duties and paying the taxes and fees that are supposed to go to the government. As important as it is to have this type of insurance if you’re an importer, here is what you need to know.
Three Parties Involved
When it comes to this type of insurance, there are three different parties involved. The first party is the insurance company; the second is an importer or broker, while the third is the beneficiary.
What Happens if You Don’t Comply?
It’s always important to make sure that all of your fees are paid off. This goes for all walks of life. However, if you don’t comply, then you may be in breach of contract. In fact, if this is discovered, you could end up having to pay duties or a different importation bond condition.
At the end of the day, you can’t run a business without insurance. Additionally, it’s even more difficult when you rely on international shipping for your cargo. Despite its convenience, also keep in mind that it’s illegal not to have this form of insurance if you’re shipping international cargo.