Cargo Insurance
Logistics Term
Cargo Insurance Definition
Cargo insurance is an insurance cover that protects shipments from damage, theft, and loss during transit. When shipping freight, many things can go wrong, so you want to ensure it's covered. While carriers and forwarders have insurance, they are not always fully liable for losses.
Cargo insurance ensures you'll receive compensation based on the value listed on the commercial invoice. If there's no commercial invoice, market value determines the payout. Transport costs are also usually reimbursed.
When to Get Cargo Insurance
It's best to get cargo insurance when the value of your freight exceeds the amount the carrier or forwarder would be liable for. But how do you determine that? The simplest way is to speak with the carrier or forwarder about their insurance and what it would cover.
As with anything, the premium and coverage depend on several factors, including:
- Value of the freight
- What the freight is
- Destination
- Transport type
*This is not financial or insurance coverage advice. Always speak to an insurance specialist or financial advisor to get the best information for your situation.
