What is freight insurance?
Freight insurance covers the financial loss you'd suffer if goods are lost, damaged or destroyed while being transported. It applies whatever the mode — ocean, air, road or rail — and can cover a single shipment or every shipment you make in a year.
Carriers and forwarders accept only limited liability for the freight in their care, and in many situations none at all. A freight policy pays out based on the value of your goods, not on what a carrier can be made to pay.
Common types of freight policy
- 01
All-risks policy
Covers physical loss or damage from any external cause, except the exclusions listed in the policy. The broadest and most popular option.
- 02
Named-perils policy
Covers only the specific risks the policy names — such as fire, theft, collision or sinking — at a lower rate.
- 03
Declared-value policy
Pays out on a value the shipper declares in advance, commonly the invoice value plus freight and a 10% margin.
For shippers, forwarders and carriers alike, freight insurance stops an accident, a theft or a dropped container from turning into a hole in the balance sheet — and keeps goods, and trade, moving.
Who it’s for
- Freight forwarders & NVOCCs
- Customs brokers & clearing agents
- Importers & exporters
- E-commerce sellers shipping abroad
- Project cargo shippers
Typically not covered
- Delay and loss of market
- Inadequate or unsuitable packing
- Inherent vice of the goods
- Wilful misconduct of the insured
Exact terms vary by insurer. Your broker will walk you through every exclusion before you buy.