Reasons to buy
Cargo insurance (also called marine cargo) covers physical
damage to goods whilst travelling by land, sea and air.
What does cargo insurance cover?
Cargo insurance is usually provided by one of three Institute of
Cargo Clauses – A, B or C, plus War and Strikes Clauses.
Simply put, cargo clause A provides the most cover, with B and
C clauses giving less cover.
Here are some typical examples of what is covered under an
annual cargo policy.
S All transits from UK to/from anywhere in the world (subject
to legislation or sanctioning which may prevent the
placement of cover in some countries)
S Cover whilst the goods are travelling to or from the
premises of forwarders, hauliers, packers, warehouses.
S Cover whilst at the premises of forwarders, hauliers,
packers, warehouses (as long as they are in the ordinary
course of transit).
S Sea, air, road rail or postal conveyances.
Why do I need Cargo insurance?
S Cargo insurance pays you for the actual losses or the
“Stated/Declared Value” of the goods, whichever is less.
S “General Average” dates back over 300 years and relates
only to ocean and sea voyages. Under General Average, if
goods are jettisoned to save the overall venture but your
goods survive intact you may be expected to contribute to
the losses of the other shippers. e.g. you could ship £100,000
worth of goods but be faced with a £30,000 General Average
claim for cargo lost by others and you would be forced to
post a Bond or Letter of Credit/Cash for the full £30,000 for
the period of time it takes for the General Average claim to
ACE European Group Ltd.
work its way through the courts.
100 Leadenhall Street What are the common myths?
London EC3A 3BP
My haulier has cover so I don’t need cargo insurance.
+44 (0)20 7173 7000 tel
+44 (0)20 7173 7800 fax Wrong, many transit policies provide cover based on a price per
tonne rather than the actual value of the goods
Even if an “All Risks” liability cover is supplied by a haulier,
Authorised and regulated by
the Financial Services Authority
how well do you understand their policy?
Registered in England and Wales
For example there may be clauses in place regarding vehicle
security which could prevent a payout if these are breached or
possibly even subject to an ‘average’ clause. Both instances may
February 2011 leave you out of pocket and needing to take civil action to recover
I have purchased the goods with insurance included (CIF)
Cover may be restricted, in force with an insurer which may not meet UK standards
and the wording may not even be in English
S If you have not arranged your own insurance – who is going to deal with the
claim on your behalf?
As an exporter, you may often sell goods on terms where your customer is
responsible for insuring the goods. In this instance you are exposed to the risk of
damage to the goods whilst in transit and your customer refusing to accept the
goods. In the worst case scenario your customer may not have insured the goods
which could result in expensive and costly legal disputes.
Many importers assume that cover is provided by the suppliers, however there is no
requirement to provide All Risks cover which may leave you exposed to risk and you
have no control over the insurer used.
Even if your freight forwarder arranged All Risks cargo cover on your behalf you
don’t know if they have declared the shipment to the insurer, you don’t know what
the cover is, who the insurer is and you will likely be paying far more than if you
arranged the cover through your broker.
Why risk the goods you buy or sell by relying on someone else to insure these? When
you take out cargo insurance you can ensure you have;
S The comprehensive cover you require
S A policy tailored to your needs
S A reputable insurer in the UK market
S A broker to assist with managing any claims you have
S Peace of mind