What cargo insurance covers

Cargo insurance protects the value of goods while they move by ocean vessel, aircraft, truck or rail, and usually during the storage and transshipment that happen along the way. It is one of the oldest and largest specialty lines: according to the International Union of Marine Insurance (IUMI) Stats Report 2025, cargo premiums worldwide reached about $22.64 billion in 2024. Policies fall into two families. Ocean (marine) cargo covers international shipments, including the land legs before and after the sea or air voyage. Inland marine covers goods moving over land within a country, plus property that travels, such as contractors' equipment, exhibition goods and installation materials.

Why carrier liability is not enough

The carrier is not your insurer. It pays only when it is legally at fault, and even then its liability is capped:

  • Ocean shipments to or from the US: under the Carriage of Goods by Sea Act (COGSA), a carrier may limit liability to $500 per package or customary freight unit unless a higher value is declared on the bill of lading.
  • Hague-Visby countries: the limit is the greater of 666.67 Special Drawing Rights (SDR) per package or 2 SDR per kilogram of gross weight.
  • International air cargo: under the Montreal Convention, the limit rose to 26 SDR per kilogram on December 28, 2024, after the ICAO five-year inflation review.
  • US interstate trucking: the Carmack Amendment makes motor carriers liable for actual loss, but carriers may reduce it through released rates agreed on the bill of lading.

Carriers also have defenses, such as perils of the sea or errors in navigation, that can leave the cargo owner with no recovery at all. A cargo policy pays regardless of fault.

Coverage types: the Institute Cargo Clauses

Most international cargo is written on the Institute Cargo Clauses issued by the Joint Cargo Committee of the Lloyd's Market Association and the International Underwriting Association. The current set dates from 2009.

  • ICC (A): "all risks" of physical loss or damage, subject to listed exclusions. The usual choice for manufactured goods.
  • ICC (B): named perils such as fire, stranding, collision, jettison, earthquake and entry of sea or river water.
  • ICC (C): the narrowest named-perils cover, aimed at major casualties and often used for bulk commodities.
  • War and strikes clauses: separate clauses added for an extra premium.

US insurers often use American forms with similar wording. You can insure a single shipment with a certificate or buy an open cargo policy that automatically covers all shipments, declared monthly or annually. Cover typically runs warehouse to warehouse, from the first movement of goods for loading until delivery to the final warehouse, with time limits after discharge.

Common exclusions

Even ICC (A) excludes ordinary leakage, ordinary loss in weight or volume, wear and tear, inherent vice (the nature of the goods themselves), insufficient packing, delay and willful misconduct of the insured. Perishables, pharmaceuticals and high-theft electronics usually need specific conditions such as refrigeration breakdown cover, security requirements or approved routes.

General average: the risk importers overlook

When a ship's master sacrifices cargo or incurs extraordinary expense to save the voyage, for example after a fire, all parties share the cost in proportion to their values under the York-Antwerp Rules. The shipowner can hold cargo until security is posted. An insured owner's underwriter normally issues a general average guarantee; an uninsured owner may need to pay a cash deposit even if its goods were undamaged.

What drives the price

  • Commodity, its fragility and theft appeal, and the quality of packing.
  • Mode of transport, routes, ports and storage periods.
  • Annual shipped value, deductible and loss history.
  • Basis of valuation: under Incoterms 2020, a seller selling CIF or CIP must insure at least 110% of the contract price, with ICC (C) as the CIF minimum and ICC (A) for CIP.

How claims work

Note any damage on the delivery receipt, take photos, keep the damaged goods and packing, and notify your insurer at once so a surveyor can inspect. Give the carrier written notice promptly: under COGSA, notice is due on delivery or within three days if damage is not apparent, and suit must be filed within one year. After paying you, the insurer pursues the carrier through subrogation, so preserving your rights matters.

How to choose and compare

Start with an estimate from our cargo insurance calculator, then compare wording, not just rates: duration, storage limits, valuation clause, deductibles and claims service abroad. Large shippers can also explore transport reinsurance capacity. Polis Re helps you compare insurers and request quotes for single shipments or open policies through one request.