Cargo insurance is coverage that helps pay for loss or damage to goods while they are being shipped or stored in transit. It is commonly used in international freight when cargo may move by ocean, air, truck, rail, or a combination of modes. The policy terms determine what risks are covered, what exclusions apply, and who may file a claim.
What it covers
Coverage often addresses events such as theft, fire, accidental handling damage, sinking, collision, or rough weather, depending on the policy. It may apply from warehouse to warehouse, or only during a specific leg of the move, so shippers should confirm where coverage starts and ends. Some goods, including fragile, perishable, or high-value cargo, may require special terms or packing standards.
Cargo insurance is not the same as a carrier’s limited liability. A steamship line, airline, or trucking company may be responsible only under its own contract and often with strict limits, while insurance can fill the gap for the cargo owner. In practice, the importer or exporter usually arranges it through an insurer, broker, or freight forwarder, and the claim process typically relies on shipping documents such as the invoice, packing list, bill of lading, and evidence of loss or damage.