A Practical Guide to Marine Cargo Insurance for Importers and Exporters

Marine cargo insurance is one of the oldest forms of commercial insurance, yet it remains one of the most frequently misunderstood. Many importers and exporters operate under the assumption that their freight forwarder's liability coverage or the carrier's terms of carriage provide adequate protection. In most cases, they do not.

The fundamental distinction to understand is between carrier liability and cargo insurance. Carrier liability is limited — often dramatically so — by international conventions and the carrier's own terms. If your cargo is damaged in transit, the carrier's liability may cover only a fraction of the actual loss. Cargo insurance, by contrast, is structured around the value of the goods, not the carrier's capped exposure.

Coverage under a standard cargo policy typically extends to loss or damage caused by perils of the sea, fire, theft, and handling accidents. The extent of coverage depends on the clause selected — Institute Cargo Clauses (A), (B), or (C) — with Clause A providing the broadest protection on an "all risks" basis, subject to standard exclusions.

For businesses with regular shipping activity, an open cover arrangement is usually more practical than voyage-by-voyage policies. An open cover is a continuous contract that automatically insures all eligible shipments within agreed parameters, with declarations made periodically. This eliminates the risk of inadvertently shipping goods without coverage.

Working with a broker who understands your trade flows, commodity characteristics, and risk tolerance is essential to structuring marine cover that actually responds when it needs to. At Peraj, our marine team has the experience to help you navigate these decisions and the insurer relationships to source competitive, comprehensive protection.