Cargo Insurance 

Cargo insurance (also called marine cargo insurance) covers physical damage to, or loss of your goods while in transit by land, sea or air and offers considerable opportunities and cost Advantages if managed correctly.

Cargo insurance is usually provided by the means of one of three Institute Cargo Clauses - A, B or C, plus War Clauses and Strikes Clauses. Simply put Cargo Clauses A provide the most cover with B and C giving less coverage which is reflected in reduced premiums for the lower cover.

• Cargo Clauses (Air)=movement by air, which is equivalent to the A clauses. Technology Insurance Special Risks, LLC will be able to give details of exactly what cover is given by each clause so you can choose the most appropriate for your business needs and trading patterns.


• General Average=relates only to ocean and sea voyages but is still relevant in today's trading environment. General Average covers the situation where damage or loss of certain goods occurs so that the remaining cargo and the means of transport are saved.

What types of cargo insurance policies are available?

• Open Cover=this is the most usual type of cargo insurance, where a policy is drawn up to cover a number of consignments. The policy can be either for a specific value that requires renewal once the insured amount is exhausted or an permanently open policy that will be drawn up for an agreed period, allowing any number of shipments during this time.


• Specific Policy (Voyage) = Although not the norm for cargo insurance, you may from time to time need to approach an insurance company (or broker, or other intermediary) to request an insurance policy for a particular consignment. This is usually referred to as Voyage Policy as the insurance covers only that specific shipment.


• Contingency insurance (seller's interest) = As an exporter you may often sell goods on terms where your customer (as the importer) is responsible for insuring (or at least bearing the risk of damage of or loss to) the goods, for example under FOB and CFR Incoterms 2000. In these cases you are exposed to the risk of damage to the goods while in transit and your customer refusing to accept them. In the worse case your customer may not have insured the goods. If this happens and your customer attempts to avoid liability, you could seek redress through the legal system. However, this can prove very expensive, and may often be pointless. Seller's interest insurance, usually for a small premium, will cover you for this contingency. For valid commercial reasons you may not wish your customer to know you have taken out such a policy.

More and more companies recognize the long term advantage of buying cargo insurance and using the services of a specialized cargo insurance policy. If you are a small or medium sized trader you need to look more closely at this area of your trading operations. You could reap benefits for your business through enhanced protection of your interests, improved international trade administration, better trading relationships and increased competitiveness, resulting in greater profitability.

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