Cargo Insurance

The carrier's liability is not insurance

Carriers are liable for loss and damage, but their liability is capped by international convention — and the cap is based on the weight of the goods, not their value. For ocean freight it works out at a figure that is meaningless for anything other than scrap.

A pallet of electronics worth USD 40,000 and a pallet of sand of the same weight attract the same carrier liability. That is the gap cargo insurance exists to fill.

What all-risk cover includes

• Physical loss or damage from any external cause, unless specifically excluded
• General average — your share of a loss when cargo is sacrificed to save the vessel, which is a real and expensive risk
• Cover door to door, not just port to port
• The commercial invoice value plus freight, usually plus 10% to cover associated costs

What is never covered

• Inherent vice: the goods damaging themselves, such as fruit ripening or metal oxidising
• Inadequate packing, which is the most common reason a claim is declined
• Ordinary wear, leakage and loss of weight
• Delay, and any loss of market or profit caused by it
• Deliberate acts by the insured

What it costs

All-risk cover is typically a small fraction of a percent of the insured value, varying with the commodity, the route and the packing. On most shipments it is a rounding error against the freight.

We quote it as a separate line that you accept or decline. It is never bundled in silently, and we will tell you when we think a shipment genuinely does not need it.

Making a claim that gets paid

• Note the damage on the delivery receipt before signing — a clean receipt is very hard to argue with later
• Photograph the container, the seal and the cargo before and during unloading
• Notify the insurer and the carrier in writing immediately; there are short time limits
• Keep the damaged goods and the packaging until the surveyor has seen them
• Have the commercial invoice, the packing list and the transport document ready