Cargo insurance is a policy that covers physical loss or damage to your goods while they are in transit. It is separate from — and far broader than — the carrier’s legal liability, which is capped at low per-pound or per-package limits and only applies when the carrier is at fault. If a container goes over the side, a warehouse floods, or a truck is hijacked, cargo insurance is what actually makes you whole.
Carrier liability is not insurance
This is the single most expensive misunderstanding in freight. Carrier liability is a legal limit, not a promise to replace your goods.
- Ocean: under COGSA, liability is limited to $500 per package or customary freight unit unless a higher value is declared and paid for.
- Air: under the Montreal Convention, liability is limited to roughly 22 SDR per kilogram of the affected cargo.
- Domestic truck: limits are set by the carrier’s tariff and bill of lading, often tied to freight class and commonly in the range of a few dollars per pound.
Worse, carriers are excused entirely for a long list of causes — acts of God, war, inherent vice, insufficient packing, and general average events among them. A $60,000 pallet of electronics damaged in a storm can produce a legal recovery of a few hundred dollars.
What cargo insurance covers
All-risk coverage
The broadest common form. It covers physical loss or damage from any external cause not specifically excluded — impact, water, theft, fire, jettison, improper handling. Standard exclusions include ordinary wear, inherent vice, insufficient packing, delay, and loss of market.
Named-perils coverage
Cheaper and narrower. It covers only the causes listed in the policy, typically sinking, stranding, fire, collision, and general average. Anything not listed is not covered.
General average
An old maritime principle that still bites modern importers. If a vessel makes a sacrifice to save the voyage, all cargo owners contribute proportionally — even if your specific container was untouched. Without insurance, you post a cash bond before your cargo is released. This alone justifies the premium for most ocean importers.
How much does cargo insurance cost?
Premiums are quoted as a rate per $100 of insured value and typically land in a low fraction of a percent for ordinary commercial goods moving on standard routes. The rate rises with commodity risk — high-theft categories, fragile goods, temperature-sensitive pharma — and with route risk. Insured value is normally calculated as commercial invoice value plus freight plus duty plus a 10% markup, which reflects your actual out-of-pocket loss rather than just the goods cost.
Compare that against the value at risk. Insuring a container of consumer goods usually costs less than a single day of demurrage.
Where coverage gaps appear
- Incoterm handoffs. Under FOB, risk transfers at the origin port — if the seller insured only to the ship’s rail, the ocean leg is uninsured. Read our Incoterms breakdown before assuming you are covered.
- Warehouse storage. Many transit policies stop 60 days after discharge. Cargo sitting in a bonded warehouse may need separate stock-throughput coverage.
- Insufficient packing. If the loss traces to inadequate packaging, it is excluded. Proper export crating is a coverage requirement, not just good practice.
- Seller-arranged coverage under CIF. CIF only obligates the seller to buy minimum named-perils cover. That is thinner than most buyers assume.
Filing a claim
Document the damage before you sign. Note exceptions on the delivery receipt, photograph the container seal and the damage in place, and keep the packaging. Notify the insurer and the carrier promptly — carrier claim windows can be as short as three days for concealed damage. Our guide on how to file a freight claim walks through the paperwork, and OS&D reporting covers the receiving-dock side.
Go Freight is an asset-based Miami 3PL founded in 2004, with 100+ owned trucks and a 104,000 sq ft bonded warehouse at 6901 NW 26 Ave. Because we control the equipment and the warehouse, our exception documentation is generated in-house — which materially shortens claim cycles for our customers.
Frequently asked questions
Is cargo insurance required by law?
No. Cargo insurance is optional in the United States, though many purchase contracts, letters of credit, and Incoterms such as CIF and CIP contractually require it. Carriers must carry their own liability coverage, but that protects the carrier, not your goods.
Does my carrier’s insurance cover my freight?
Only up to the carrier’s legal liability limit, and only when the carrier is legally at fault. Those limits are low — $500 per package for ocean under COGSA, for example — and exclude many common causes of loss. Assume it does not cover the value of your goods.
What is the difference between all-risk and named-perils cover?
All-risk covers loss from any external cause except the exclusions listed in the policy. Named-perils covers only the specific causes the policy lists. All-risk costs more and is the standard choice for commercial imports; named-perils is a budget option that leaves large gaps.
Ship with a carrier that documents everything
Owned trucks, owned chassis, and a bonded Miami warehouse mean cleaner chain-of-custody when something goes wrong. Request a quote or call (786) 445-0150.