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  • Writer's pictureIFF, inc.


Updated: Jun 10, 2022

You have all of your ducks in a row. The timing of the production, pickup, shipping, and receiving of your goods is down to a science. Everything is in order and you have thought of it all! Or…..have you?

Did you think about cargo insurance?

Accidents happen in the shipping world. They happen quite frequently, actually. If you think about the journey your goods take from one place to the next, there are a ton of opportunities for something to go wrong. Containers topple, cargo shifts, airlines mishandle or lose the freight, fire, theft, forklift drivers can be reckless, and sometimes boats capsize or even sink. About 2,700 containers were lost at sea each year between 2011 and 2013, according to the World Shipping Council. Weather, temperature changes, breakage, and other events can also damage cargo. Every step of the way there is a chance for something to go wrong. So, what happens when it does? Many times we hear “Doesn’t the carrier have liability?” or “I thought the shipper insured this?” The truth is, if you have valuable cargo, you need to be 100% sure you are covered.


Carriers do have coverage, but it is “limited liability” coverage. This means that they are only liable to pay out damages based on the type of coverage they have. This coverage varies from carrier to carrier, but what a lot of customers find out the hard way is that it will only reimburse a fraction of the cargo’s value, and none of the transportation costs. You can be left with a bulk of damaged product and only a small portion of loss will be covered. As an example, an ocean carrier typically is liable for $500 per customary shipping unit, such as a pallet or container. That means a company that loses a container filled with $1 million in goods may recover $500! Not to mention the cost of freight transport and Customs fees that are not covered and lost in the process. This is of course, if they even approve your claim and accept liability. Uninsured claims can take months to process, and the carriers are in no hurry to prove their own fault.


So, how do you protect yourself from suffering an enormous loss? Many customers purchase additional insurance to keep this nightmare from happening. If you have high value goods, good insurance is a must. Perhaps you want the additional security of having not only your cargo covered, but the transport as well. Then insurance is the smart choice.

Freight forwarders often have good working relationships with the insurance companies that not only make insuring your cargo a painless process, but also leverage better rates. The cost is minimal in the long run, and most customers find that insurance more than pays for itself after only one incident. Claims are also much easier and faster when insurance is involved. Much like your car or home, being stuck without coverage can be a very unpleasant experience, and a costly one at that.


Several factors come into play deciding how you want to insure your cargo. Perhaps the shipper purchased cargo to the port of unloading. You may only want to cover your ground transportation from the port to your door at that point. If there is no coverage at all, and you are responsible for the move from door to door, considering insuring the entire journey might be the best option.

The mode of transportation, how the shipment is packed, value of the goods, and even the route of the cargo all come into play when getting an insurance quote. Having a knowledgeable guide with a strong relationship to the insurance company is key in making sure it is done correctly, and that you are getting the best coverage at the lowest price. Ask us how we can help, and for more information about insurance. Quotes are free, but damaged cargo is not.

Contact us at 800 288 7139 or email us at, and we’ll be glad to help.

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