What You Need to Know About Cargo Insurance


Cargo Insurance is a must-have when transporting goods. The insurance protects not only your goods, but also your relationship with your shipping company and with your clients. Insurance for transporting freight over the road differs from insurance for transporting by cargo ship (which is based on ancient maritime law) but the question remains: are you adequately covered for a potential loss? Here are some fundamentals to consider.

Who: Clarify in the terms of sale which party has the responsibility to insure. Usually the party responsible for delivering the freight is responsible, whether they are the buyer or the seller. In many cases goods will be insured when they are delivered by truck, but only at a marginal per pound rate. It may be a good idea to purchase additional coverage.

What: It’s important to carefully document each shipment’s value. Keep in mind that if you declare a value on a bill of lading, the carrier will have no choice but to upgrade its standard policy to insure the freight for the total value. This upgrade will be reflected on your freight bill. If you carry your own business insurance and it is sufficient to cover your goods, you may want to avoid declaring a value on the bill of lading.

Where and when: While some policies cover all modes of transit, some only cover ocean vessels, or exclude warehouse storage. If you are in doubt about your own policy, most transportation companies will offer the option to cover your shipment.

Coverage: Anything can happen in transit: natural disasters, theft, damage, fire, collision, and more. Some policies exclude unusual risks such as war and piracy, so read carefully to know what’s covered, or take out an “all risk” policy for peace of mind.

Cost: Cargo insurance is lightly regulated, so prices vary. Shop around to get the best deal. If what you’re shipping is unusual or complex, consider using a specialized cargo-insurance firm or per-shipment insurance from your LTL freight company.

When it comes to cargo insurance, you may be able to use a preexisting business policy if it has coverage for goods-in-transit. In many cases your trucking company will have high value rates negotiated if you wish to upgrade. Many companies do this as the insurance cost is listed on the specific freight bill. This makes it easy to associate to a particular shipment and also makes it simple to account for.

To learn about CSA’s cargo insurance coverage, check our our insurance page or contact us if you’ve got specific questions about your shipment.

Share this post

About Us