Home Insurance What Cargo Insurance is and types

What Cargo Insurance is and types


Those in the haulage business deserve to understand why buying cargo insurance is essential. Certainly, the movement of goods from a far distant country to another can be lucrative but not without some major risks.

Since the world has become more advanced in doing business with partners across countries, cargo haulage ensures goods are distributed when due and businesses grow via this means. However, a lot can be destroyed or lost in the blink of an eye, throwing cargo business owners and users at a great loss.

Therefore, coverage that helps you stay in business and never go bankrupt is necessary. Both for those using cargo services and cargo business owners.

This article will help business owners to know the type of cargo insurance they need to stay afloat in times of business crises.

Also Read:  What is Commercial truck insurance

What is cargo insurance?

When we speak of cargo insurance, we are specific about coverage that protects shipments from theft, loss, or damage. Shipment here covers air, land, sea, and train.

Cargo insurance is an essential protective measure that cushions the risk that may arise when a cargo is in transit. The risks may arise from natural disasters or accidents unforeseen, and theft. 

All these can lead to loss or damage and incur extensive financial loss for business owners. When cargo insurance is in place before these risks, the financial losses will not send you out of business.

When can business owners opt for insurance?

Let’s say your business has gone beyond delivering goods within your country. You have customers in other countries asking for goods to be shipped to them in their countries.

Before you begin to arrange for their goods to be shipped off either by air, sea, or land, you must first purchase good cargo insurance from a reputable company. Irrespective of your packaging expertise against moisture, impact, dust, or anything that can affect the goods, you can never be too sure.

Unforeseen circumstances can arise; the only way to handle them is by acquiring that coverage before sending out goods.

Also Read:  Top 6 Good vehicle insurance companies in Canada

Types of cargo insurance

The type of cargo insurance you purchase depends on how you transport your goods, that is, your mode of goods transportation. Also, this insurance has separate things they cover according to the type you go for.

The point of take-off, type of goods, and destination are factors that determine the insurance coverage. That said, here is the type of cargo insurance available to cargo businesses.

Air cargo insurance

Cargo planes are majorly used during this transportation. The type of insurance that covers air cargo protects the goods from damages or loss caused by bad weather, turbulence, loading, offloading, or air accidents while in transit.

Land cargo insurance

Using land cargo includes transporting goods with trains or trucks. It is also recognized as road or rail shipment.

Land cargo insurance covers financial loss arising from thefts, collisions, natural disasters, or accidents.

Marine cargo insurance

Cargo business owners shipping their goods through the sea require marine cargo insurance. Marine insurance covers financial loss caused by ship accidents, bad weather conditions, offloading goods, loading goods, water piracy, and other risks.

Types of cargo coverage

When dealing with cargo insurance, you come in contact with two major types of coverage. The coverage serves you according to your preferred policy.

Let’s look at some of them.

All risk coverage

The all-risk coverage widely protects from losses and damages regardless of how it happened. However, there are some exceptions to this coverage type.

Your insurance provider will explain where and when all risk coverage stops. Most popular exemptions include abandoning a cargo while in transit, carelessness during delivery, etc.

Named perils

Named perils coverage is more targeted and specific. It lists out the kind of perils it covers for a cargo.

During your insurance purchase, your insurer will list the parts and things that will go under coverage when you become a policyholder.


In summary, there are many benefits you gain from acquiring cargo insurance for your business. As you expand and send goods internationally, your insurance makes sure you do not suddenly go out of business due to circumstances beyond one’s control. 


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