Cargo Insurance & Liability
How marine cargo insurance works, what carrier liability actually covers, and how to choose the right level of protection for your shipment.
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Cargo Insurance Explained: Why Basic Carrier Liability Is Never Enough
Most shippers do not realise how little protection carrier liability actually provides. Here is what cargo insurance covers, what it costs, and why you almost certainly need it.
Read guideCargo Insurance FAQ
Does the carrier's liability cover the value of my goods?
Almost never in full. Carrier and forwarder liability is capped by international conventions and trading conditions, and is calculated by weight rather than by cargo value — so for anything valuable the recoverable amount is a small fraction of the loss. Separate marine cargo insurance covers actual value, which is why it exists as a distinct product.
What is the difference between Institute Cargo Clauses A, B and C?
Clauses (A) is all-risks cover, subject to stated exclusions. Clauses (B) and (C) are named-perils covers that pay only for losses from specific listed events, with (C) the most restricted of the three. The practical consequence is that a shipment insured to (C) may be uninsured for the loss that actually occurs, such as water damage from a leaking container.
How much should I insure my cargo for?
The market convention is 110 percent of the commercial invoice value plus freight. The extra 10 percent covers the incidental costs of a loss — survey fees, disposal, and the buyer's lost margin. Insuring only the invoice value leaves you short, and over-insuring does not pay out more, because marine policies indemnify actual loss rather than the sum insured.
Does CIF mean my cargo is properly insured?
Only to a minimum standard. Under CIF the seller must insure, but Incoterms 2020 sets the floor at the restricted Institute Cargo Clauses (C). CIP, by contrast, requires all-risks Clauses (A). If you are buying CIF and want broader protection, negotiate it expressly in the contract or arrange your own top-up policy.
What can invalidate a cargo insurance claim?
The most common causes are insufficient packing, delay as the sole cause of loss, inherent vice in the goods themselves, and signing a clean proof of delivery for cargo that was visibly damaged. Inadequate securing inside a container is frequently treated as insufficient packing rather than an insured peril, so bracing and dunnage matter to your claim as much as to your cargo.
What should I do immediately if cargo arrives damaged?
Note the damage on the delivery receipt before signing, photograph the cargo and packaging in place, keep everything including the packing materials, and notify the carrier and insurer in writing straight away. Most carrier contracts impose very short windows for notifying visible damage — often three days or less — and a clean signed receipt makes any later claim substantially harder.