What is Cargo insurance?


Imagine that the container you ordered with the merchandise travels along with hundreds of other containers in one of the Atlantic's ships. It was unfortunate that in a moment this ship would have to face the elements in the form of hurricane Michael. The risk of damage to the product or its complete destruction in contact with the wind blowing 200 km / h is significantly increased. What protection do you need to sleep peacefully and not worry about losses for your company?

It should be noted that, of course, no ship will dare approach the area endangered by a hurricane, but when ordering goods, we should be aware of the risks and prepared for various situations.

At this point, let's stop at the most important thing. What, in such a situation will secure our interests, assuming that we are the owner of this product?


Carrier's liability, or cargo insurance?


There is only one correct answer. Cargo insurance, no question about it! Why? In this case, we speak of damage caused by force majeure, and the carrier's liability does not cover this.


Looking at the matter more widely: what is the carrier's liability and what is Cargo insurance?


Property is protected by both types of insurance with the difference that the carrier's liability, as the name suggests, protects the interests of the carrier. If the carrier properly fulfils the contract, in case of damage to the goods we will not get any compensation.


By using Cargo insurance, the interests of the owner of the goods are secure and in the event of damage or loss of property, he will receive financial compensation up to the full sum insured. Importantly, Cargo insurance is paid quickly, which is extremely important.


What else to think about? Regarding the type of clause:

  • Institute Cargo Clauses (A) 1/1/09
  • Institute Cargo Clauses (B) 1/1/09
  • Institute Cargo Clauses (C) 1/1/09

As the first is so-called insurance against all risks, i.e. includes the risk of loss or damage to the subject of insurance (except for excluded by the provisions of exclusion clauses), this is the clause that should look into.

In the air freight, it will be the Institute's Cargo Clauses (aerial) 1/1/09, which have the same insurance coverage as ICC (A) 1/1/09, but take into account the specificity of air transport.


Summarizing, when we transport goods from place A to B, the subject of Cargo insurance should at least be considered to know what the consequences are if you, for any reason, decide not to get it. This will allow you to make an informed decision. As the subject of insurance is quite wide, it is always worth inquiring about the interesting details of your forwarder, to which I encourage you.