Cargo insurance

Cargo insurance compensates the cargo owner for losses incurred when the cargo being transported is damaged, destroyed, or lost. Unlike carrier liability insurance, it covers the actual value of the cargo and applies regardless of who is at fault.

Who is this insurance relevant for?

Cargo insurance is relevant to the party that bears the risk during transport—usually the cargo owner, the seller, or the buyer. Which party this is depends on the Incoterms rule, which determines the point at which risk transfers from the seller to the buyer.

Relevant if your company

manufactures or trades in goods and ships them to customers
imports goods and assumes the risk from the point of loading
transports high-value, lightweight, or temperature-sensitive cargo
arranges transportation as a freight forwarder and has an interest in the cargo
is a carrier that offers the customer a wider protection than under the convention
transports cargo pledged to a bank or leasing company

First, check the Incoterms.

EXW, FCA, FAS, FOB — the risk passes to the buyer early, he should insure
CFR — the seller pays the freight, but the risk transfers upon loading.
CIF, CIP — the seller is required to arrange insurance.
DAP, DPU, DDP — risk remains with the seller until delivery.

An important detail: CIF requires only minimum ICC (C) coverage, whereas CIP under Incoterms 2020 requires the most extensive ICC (A) coverage. This is often overlooked in contracts.

If the insurance is purchased by a party other than the one actually bearing the risk, disputes regarding the payout recipient may arise in the event of damage. Therefore, before comparing prices, it is worth clarifying who the invoice is issued to and at what point the cargo is considered handed over.

What does cargo insurance protect against?

The scope of coverage is selected based on the Institute Cargo Clauses (ICC). ICC (A) covers all risks, except for expressly listed exclusions. ICC (B) and ICC (C) cover only specifically listed risks, with the list being shorter for (C) than for (B).

ICC (A) — All Risks cover

All transport risks, except for the exceptions listed in the rules.
Theft and loss of cargo
Damage during loading, transshipment, and unloading
Intermediate storage during transport
Suitable for high-value, easily damaged, and theft-prone cargo.

ICC (B) and (C) — named risks

Fire and explosion
Vehicle accident, rollover, running off the road
Vessel running aground or sinking
Loss of cargo during loading or unloading — ICC (B) only
Natural disasters and ingress of water — ICC (B) only
Theft is usually not included.

In addition to the value of the cargo, it is possible to insure transport costs (freight), insurance costs, and projected profit—typically up to 10% of the cargo’s value.

How does it differ from carrier liability insurance?

These are two different products that are often confused. Carrier liability insurance covers the carrier and applies only in the event of their fault, up to the limits established by international conventions. Cargo insurance covers the cargo itself for the benefit of its owner.

:;.?/:;

	Carrier’s Liability Insurance	Cargo Insurance
What is covered	Carrier’s liability	the cargo itself
For whose benefit:	Carrier	Cargo Owner
When is payment made	Only if the carrier is at fault	Regardless of fault.
How much is paid	up to the Convention limit based on weight	up to the insured amount based on value.
Who buys	the carrier	the owner, the seller or the buyer

Limits of liability by mode of transport. Carrier liability is limited across all modes of transport, and the limit is calculated based on weight rather than the value of the cargo:

Mode of transport	Convention	Limit
By road	CMR	rate of 8.33 SDR per kg
By sea	Hague-Visby Rules	2 SDR per kg or 666.67 SDR per package.
By air	Under the Montreal Convention	approximately 19–22 SDR per kg (the limit is periodically reviewed).

With the SDR exchange rate hovering around €1.20, the limit for road transport is approximately €10 per kilogram. For high-value, lightweight cargo, this is often insufficient. Read more on the carrier’s civil liability (CMR) insurance page.

In practice, the two products do not replace each other: the carrier insures their liability, while the owner insures their goods.

What does this insurance not cover?

Cargo insurance covers unexpected events during transport. It does not compensate for losses resulting from the inherent nature of the cargo, improper preparation, or circumstances unrelated to the transport.

Not included in the coverage

Inappropriate or insufficient packaging
Natural loss — evaporation, drying out, shedding
Inherent properties of the cargo and damage resulting from them
Delay and losses incurred as a result
Lost income exceeding the agreed share of profit
Intentional acts of the policyholder
War, strike and terrorism risks without a separate supplement

Conditions under which the payment may not be made

Failure to secure seals or damage to seals
Non-compliance with GPS tracking or temperature recording requirements
Stopping in unauthorized or prohibited areas
Failure to comply with the double-locking requirement
Leaving the cargo unattended

Before signing, it is worth checking whether you can realistically meet these requirements. If not, it is better to choose an offer with terms that align with your logistics process.

One-off or annual insurance?

The choice depends on the frequency of shipments. One-off insurance is suitable for infrequent or particularly valuable shipments, while an annual contract is best for regular shipments.

Single-shipment insurance

Infrequent or irregular shipments
Particularly valuable one-off shipment
One-off export or import transaction
The price is calculated for a specific shipment.
A request is submitted separately for each shipment.

Annual cargo insurance

Regular shipment flows
Regular routes and partners
The price is calculated based on projected turnover and finalized based on actual figures.
All shipments are automatically covered.
One contract for a year — less administration

The most common mistake is to stick to one-time insurance when there are already many shipments. It is enough to forget to submit a request once, and that particular shipment remains uninsured. An annual contract eliminates this risk completely.

What determines the cost of cargo insurance?

The premium typically ranges from a fraction of a percent to a few percent of the cargo’s value. The exact rate depends on the type of cargo, the route, and the selected terms.

Value and type of the cargo. Electronics, pharmaceuticals, excisable goods, and branded clothing are subject to stricter scrutiny.
Packaging and method of preparation. Container, pallet, birail, open platform or deck transport.
Mode of transport and route. Land, sea, air, or a combination thereof.
Number of transshipments and intermediate storage. Every transshipment entails additional risk.
Selected ICC terms. ICC (A) is more expensive than ICC (B) or (C).
Deduction. A larger one reduces the installment.
Claims history. The last three years are evaluated.
In the case of an annual contract — projected turnover. The initial payment is calculated based on it.

What to decide before taking out insurance

Several decisions determine whether you will recover the full loss incurred in the event of damage.

Sum insured. Not only the value of the cargo, but also the freight, insurance costs, and projected profit.
ICC terms. Are the listed risks sufficient, or is protection against all risks required?
Beneficiary. If the cargo is pledged or financed, the bank or leasing company is designated as the beneficiary.
Deduction. Minor losses during transport occur frequently—it is worth considering the value threshold at which you want coverage.
Storage during transport. Check what duration is included in the coverage.
Safety requirements. Will you realistically comply with the conditions regarding seals, tracking, and stops?
Open transport. When carried on a platform or on deck, ICC (B) and (C) conditions may be restricted.

A common mistake regarding the insured amount. Only the invoice value is specified. However, if the cargo is lost, you lose both the freight charges paid and the projected profit—meaning the actual loss exceeds the cost of the goods.

What you will need to fill out the questionnaire

We will retrieve the company name, address, and NACE code from the Centre of Registers—you simply need to enter the company code. It is useful to have the following ready in advance:

Name and description of the cargo
The packaging and the method of preparation for transport
The number of cargo items and the gross weight
The value of the cargo and the Incoterms rule
The route, mode of transport, and transshipment points
Beneficiary
Preferred ICC terms
Insured events over the past three years

For an annual contract, additional information regarding projected annual turnover, typical routes, and the breakdown of cargo types will be required. Completing the questionnaire for a one-off shipment takes about 6–8 minutes.

Frequently Asked Questions

What is the difference between cargo insurance and carrier liability insurance?

Carrier liability insurance covers the carrier and applies only when the carrier is liable for the damage, subject to the weight-based limits established by the convention. Cargo insurance covers the cargo itself for the benefit of its owner; the actual value is compensated regardless of who is at fault.

Who is responsible for insuring the cargo — the seller or the buyer?

The party that bears the risk during transport is determined by the Incoterms rule. Under EXW, FCA, and FOB, the risk transfers to the buyer early, so the buyer should arrange the insurance. Under DAP, DPU, and DDP, the risk remains with the seller until delivery. For CIF and CIP, the seller is required to arrange the insurance.

What do ICC A, B, and C mean?

These are the Institute Cargo Clauses—international terms for cargo insurance. ICC (A) covers all risks, except for those explicitly listed as exclusions. ICC (B) and ICC (C) cover only specifically named risks, with the list of covered risks being shorter for C than for B. Theft is generally not included in ICC (B) or (C).

Can I insure the value of the cargo together with the profit?

Yes. The insured value can include not only the value of the cargo but also transportation costs (freight), insurance costs, and projected profit—typically up to 10% of the cargo’s value. If the cargo is lost, you also lose the freight charges you have paid, so it is worth taking this into account.

Does the protection apply during reloading and storage?

Yes, transshipment and intermediate storage during transport are generally included in the coverage. The duration of storage is limited—often to 30 days. Longer storage periods must be arranged separately.

Is the insurance valid worldwide?

By default, coverage applies to transport by land, sea, and air, both within and outside the EU. Certain destinations may be restricted or subject to individual assessment; this is specified when the proposal is prepared.

When is it worth choosing an annual contract instead of one-off insurance?

When shipments become regular: under an annual contract, the price is calculated based on projected turnover and finalized according to actual figures, while all shipments are covered automatically—eliminating the need to remember to insure each one individually.

Are the cargoes prohibited from use or previously transported?

Yes, but the conditions may vary. For used or previously transported cargo, the insurer often asks for a description of the circumstances of the previous transport and the current condition. It is worth specifying this in the questionnaire right away.

Related insurance products

Cargo insurance covers goods during transport. You may also want to look into other insurance products that cover related areas.

Carrier's liability (CMR)

Carrier’s liability for the cargo entrusted to it

Business Property Insurance

Inventory and goods in the warehouse when not in transit

General civil liability

Damage to third parties arising from your activities or products

Insure your cargo

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