Basics of Cargo Insurance Explained

cargo insurance

Do you ship goods from overseas to the United States?  Have you ever wondered what would happen if that ship sank or the containers were lost at sea? Do you need cargo insurance? What about damages to your goods while in the container at sea or over the road?  We’re going to answer some of these questions and more coming right up.

Hi, I’m Gordon Coyle welcome to my channel where I talk about different insurance and risk issues on the minds of business owners. 

If I don’t entirely answer the question on your mind about cargo insurance, then let me know.  Drop me an email or give me a call!

Now when we talk about cargo insurance, we can be talking about moving your goods over the ocean by cargo ship, over the road by trucks, or over the rails by train, or finally through the air in a cargo jet

Regardless of the conveyance, your goods can be covered by a cargo policy.

The most common cargo we insure are goods coming in from China, the Far East, and Europe to the U.S. by Ocean, then having the ocean containers loaded onto trucks to be trucked to their destination.

An ocean marine cargo policy can cover all your goods shipped during the course of the year by any conveyance – like I mentioned, Ocean Freighters, Trains, Air Cargo Jets, and Trucks.

Do you need cargo insurance?

In most cases you do.  The shipping lines and freight forwarders do not cover you for your loss should you suffer a claim. 

While you can buy insurance through your freight forwarder, I only recommend doing that on a “one-off” type basis. 

If you have several voyages a year, I recommend having your own insurance where you negotiate the coverage limits and premiums and control your own coverage.

Do claims ever happen?

Unfortunately, they do.  I’ve settled many claims where containers went overboard on a ship or had water damage during transit, as well as goods damaged in transit over the road as well. 

In fact, if you ship in LCL and LTL containers the risk of loss goes up as goods are handled multiple times during a voyage. 

If you ship FC or full container that risk lessens since it’s packed at the factory and opened at your dock or your logistics company loading dock but claims still occur. 

What does cargo insurance cost?

The cost of cargo insurance will be based on the types of goods you ship, the packaging of those goods, where they originate from and are being shipped to, the values being shipped, and the limits of coverage purchased. 

If you’d like to find out what it would cost to insure your goods, we’d be happy to work with you on getting you quotes on that.

Finally, Why get cargo Insurance?

As I’ve mentioned, the shipping line has no liability for losses you may suffer, and if you use a freight forwarder they usually have no liability either, so for your own peace of mind it makes sense to have coverage. 

You only need to suffer one large claim to be a huge multiple of the premiums you pay for insurance to make it worth it.


Leave a Comment