Marine Cargo Insurance
Marine Cargo Insurance covers physical loss of or damage to goods while in transit — by sea, and typically the connecting air and land legs too. It protects the cargo owner against perils of the journey: heavy weather, vessel casualties, fire, water damage, theft, and mishandling, from the point the goods leave the seller's warehouse to arrival at the buyer's.
Cover is usually written on standard Institute Cargo Clauses (A, B or C), ranging from broad "all risks" (Clause A) to named-perils cover (B and C), with war and strikes added separately. The insured value is normally the goods' value plus freight and a margin (often CIF plus 10%). Marine cargo insurance is closely tied to Incoterms, which determine which party bears the risk — and therefore should insure — on each leg. It is essential protection given that carrier liability under the bill of lading is limited and often far below the cargo's real value.
Carriers' liability for lost or damaged cargo is capped low — often a fraction of the goods' value — so without cargo insurance the owner bears most of a serious loss. Marine cargo insurance closes that gap, and knowing how it interacts with Incoterms (who bears risk on which leg) is essential to making sure a shipment is actually protected.
What are Institute Cargo Clauses?
Standard sets of cargo cover — Clause A (all risks), B and C (progressively narrower named perils) — that define what a marine cargo policy insures.
Why insure cargo if the carrier is liable?
Carrier liability under the bill of lading is limited and often far below the cargo's real value, leaving a large gap that insurance covers.