Cargo insurance: when it is needed and what it costs
When cargo insurance is really necessary, what the cover includes and how the cost of a policy is formed.
What a policy covers
Cargo insurance protects against financial loss when goods are damaged, lost or stolen in transit. A standard policy covers transport risks: road accidents, damage during transhipment, the effects of storms, theft. Extended programmes add further risks.
It is important to understand that the carrier’s liability under CMR is limited and often does not cover the real value of expensive cargo. Insurance closes that gap.
Cost and when it is mandatory
The rate is usually a fraction of a percent of the cargo value and depends on the type of goods, the route and the mode of transport. For expensive, fragile and perishable goods insurance is particularly justified.
Under CIF and CIP, insurance is the seller’s obligation. In other cases the cargo owner decides. We help arrange the policy and choose the right cover.
In practice, the base “all risks” rate for standard industrial goods starts at 0.3% of the invoice value; for glass, electronics, solid-wood furniture and goods prone to breakage the insurer applies a loading, and for sea shipments in a container the rate is usually lower than for road groupage with several transhipments. The sum insured is the value of the goods plus freight and, as a rule, 10% expected profit. Understating it to save on the premium makes no sense — the payout will be proportionally smaller.
What to do if goods arrive damaged
- 1Do not sign a clean CMR
If the packaging shows signs of impact, opening or wetting, note the damage on the waybill at acceptance, in the driver’s presence. - 2Photos and video
Record the goods before and after opening and keep the packaging until inspection. - 3Surveyor
For major damage a surveyor is called; the insurer appoints one within a day. - 4Claim
File the claim within the period in the policy, usually 3–5 days. We support the client at every step and assemble the documents.
Insurance and carrier liability are not the same
Under the CMR Convention a road carrier is liable for no more than 8.33 SDR per kilogram — about 1,000 roubles per kg at the current rate. For a 500 kg machine worth €60,000, the carrier’s limit is less than a tenth of the price. A sea carrier under the Hague-Visby Rules is limited even more, by package rather than by weight.
That is why the cargo owner needs a policy: it covers the gap between the real value and the carrier’s limit, as well as cases where the carrier is not at fault at all — a storm, an accident caused by a third party, theft from a warehouse.
Questions and answers
Who must insure the goods under CIF or CIP?
The seller. Under other terms the cargo owner decides.
What is the sum insured?
The value of the goods plus freight and, as a rule, 10% expected profit.
Why is carrier liability not enough?
Under CMR it is capped at 8.33 SDR per kg, which for valuable goods covers only a fraction of the loss; sea carriers are limited even more.
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