Cargo insurance on international shipments: what the policy covers and what it costs
Carrier liability under the international conventions is limited and almost never covers the real value of the goods. How cargo insurance works.
Why carrier liability is not enough
Under the international conventions carrier liability is limited: for road transport (CMR) about 8.33 SDR per kilogram, for sea even less. For light but valuable goods — electronics, cosmetics, premium clothing — the carrier’s compensation covers only a small part of the real loss.
Cargo insurance closes this gap: the policy covers the full invoice value of the goods and often the value including freight and expected profit (up to 110% of the CIF value).
What the policy covers and what it costs
Standard “all risks” cover includes damage and total or partial loss of the goods along the whole route — from the shipper’s warehouse to the consignee’s warehouse, including transhipments and temporary storage. Exclusions usually concern inadequate packaging, the inherent nature of the goods and force majeure for certain categories.
The premium depends on the type of goods, route, packaging and consignment value — as a rule a fraction of a percent of the sum insured. For fragile and valuable goods insurance pays for itself with the first incident. Whether you or your customer arranges it depends on the Incoterms term; under CIF and CIP it is the seller’s obligation.
What to do if goods arrive damaged
- 1Record at acceptance
Note the damage on the transport document at the moment of acceptance. - 2Evidence
Take photos and draw up a report with the carrier’s representative. - 3Claim
File the claim with the invoice, packing list and inspection report. Without these documents the insurer may refuse to pay.
How we help
We include insurance in the shipment on request and support the claims process: we help record the damage correctly and assemble the documents for the payout. Because cover runs from warehouse to warehouse, it protects the goods from the moment they leave your premises, through consolidation and transhipment, until your customer accepts them.
Questions and answers
How much of the value can be insured?
The full invoice value, and often the value including freight and expected profit — up to 110% of the CIF value.
What is usually excluded?
Inadequate packaging, the inherent nature of the goods and force majeure for certain categories.
What is the most common reason for a refused claim?
Damage not recorded at acceptance: without a note on the transport document, photos and a report, the insurer may refuse to pay.
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