Final answer:
The value of cargo when insuring it is determined based on the worth of the goods being transported. Accurately declaring the value to the insurance company is important in order to receive appropriate coverage. Various methods such as market value, replacement cost, or agreed value can be used to determine the value of the cargo.
Step-by-step explanation:
When insuring cargo, the value is determined based on the worth of the goods being transported. It is important for the shipper or owner of the cargo to accurately declare the value to the insurance company in order to receive appropriate coverage. The value of the cargo can be determined through various methods such as market value, replacement cost, or agreed value.
For example, if a shipment of electronics is being insured, the value can be determined by considering the market value of the electronics at the time of shipping. If the cargo is unique or has a specific value, an agreed value can be determined between the shipper and insurance company.
Ultimately, the value determined when insuring cargo is crucial for ensuring that the appropriate coverage is provided and that potential losses can be adequately compensated.