- Cargo insurance covers loss or damage to goods during international transit by sea, air, rail or multi-modal transport.
- The insured value is normally calculated based on cargo cost plus freight and a reasonable margin of expected profit.
- Different coverage clauses (ICC A / ICC B / ICC C) offer varying scopes of protection against risks.
- ICC A is the widest cover, while ICC C mainly covers major casualties such as vessel sinking, collision and fire.
- Cargo insurance typically attaches to the shipment, meaning risk may transfer between buyer and seller under Incoterms rules.
- General exclusions usually include inherent vice, ordinary wear & tear, delay losses and wilful misconduct.
- Insurance cover starts when goods leave the warehouse of origin and terminates upon arrival at the designated destination warehouse.
- In case of damage or loss, timely notification, photo evidence and survey report are required for claims settlement.
- Open cargo policy is suitable for frequent shippers, providing automatic cover for all shipments within the policy period.
- It is strongly recommended to match insurance arrangement with sales terms such as FOB, CFR and CIF to avoid coverage gaps.