Cargo Insurance Guide

1. What Is Cargo Insurance?

Cargo insurance protects the value of your goods during transportation—whether by sea, air, road, or multimodal shipping.

It covers losses caused by:

• Physical damage

• Theft or pilferage

• Accidents during loading or unloading

• Weather-related incidents

• Container falling, tipping, or shifting

• Fire or explosion

• Vessel accidents

Without insurance, you may only receive a small compensation from the carrier—far less than your actual loss.

2. Why Cargo Insurance Is Important

✓ Protects Your Financial Risk

If goods are damaged or lost, the cost comes directly out of your pocket unless you are insured.

✓ Carriers Have Limited Liability

By law, shipping companies and airlines compensate much less than the cargo’s actual value.Example: Sea carriers often pay only a few dollars per kilogram, regardless of the value of the goods.

✓ Reduces Stress & Disputes

Insurance speeds up claims and reduces arguments with suppliers or transport companies.

✓ Required for High-Value or Fragile Items

Products such as electronics, glassware, machinery, and cosmetics should always be insured.

3. Types of Cargo Insurance

1. All-Risk Insurance (Most Recommended)

Covers the broadest range of risks:

• Breakage

• Water damage

• Theft

• Rough handling

• Accidents

Best for: General consumer goods, electronics, Amazon FBA shipments, machinery.

2. Named Perils Insurance (Specified Risks)

Covers only risks listed in your policy, such as:

• Fire

• Collision

• Overturning

• Severe weather

Best for: Low-value goods or non-fragile cargo.

3. Total Loss Insurance

Covers only complete loss of the shipment, not partial damage.

Best for: Low-cost bulk goods or full-container shipments (FCL).

4. What Cargo Insurance Does Not Cover

Even “all-risk” insurance has exclusions.

Common exclusions include:

• Poor or inadequate packaging

• Cargo defects or manufacturing faults

• Delays (unless caused by insured events)

• Temperature damage (without special coverage)

• War or political incidents (unless added separately)

• Fraud by the shipper

Always check the terms before purchasing.

5. How Much Does Cargo Insurance Cost?

Insurance costs vary but usually follow a simple formula.

Standard calculation:

Insurance Cost = (Cargo Value + Freight + 10%) × Insurance Rate

The 10% represents buffer coverage for unforeseen expenses.

Typical rates:

• 0.3%–0.8% of cargo value for all-risk

• 0.2%–0.5% for named perils

• 0.1%–0.3% for total-loss insurance

High-value, fragile, or temperature-sensitive goods cost more to insure.

6. Common Claim Scenarios

Cargo insurance helps with:

• Damaged goods on arrival

• Missing cartons or pallets

• Wet or moldy cargo

• Broken electronics or glass

• Cargo stolen during trucking

• Container accidents at port

With proper documentation, claims can be processed quickly.

7. What You Need to File a Claim

If you experience loss or damage, you will typically need:

• Commercial invoice

• Packing list

• Bill of lading or airway bill

• Photos or videos of damage

• Inspection report (if required)

• Formal claim letter

• Insurance certificate

Good record-keeping speeds up reimbursement.

8. How to Choose the Right Cargo Insurance

Ask yourself:

• What is the value of my goods?

• Are they fragile or sensitive?

• How long is the shipping route?

• Does the carrier frequently handle similar cargo?

• Is the climate a risk factor?

For most importers, all-risk insurance offers the safest protection.

9. Cargo Insurance in DDP Shipping

If you use DDP (Delivered Duty Paid) services:

• Some DDP providers include insurance

• Others offer it as an add-on

• Make sure to ask whether your shipment is fully covered

Never assume DDP automatically includes insurance—always confirm.

Contact Information

• Whatsapp: +86-18098151030Nancy/+91-9952044576Mallesh Gujjala/+86-181 2571 3582Rose/+86-13416222617Jack/+86-15918480524CC/+86-18125730121Kimi

• Email: nancy@gmrglobal.co

• Address: 201, Second Floor, PVR Building, Lawsons Bay Colony, Pedda Waltair, Visakhapatnam, Andhra Pradesh 530017, India

672C+H8F, Vichoor, Echakuzhi, Manali New Town, Chennai, Edayanchavadi, Tamil Nadu 600103

1315, 25th Main Rd, Kottapalya, Jayanagara 9th Block, Jayanagar, Bengaluru, Karnataka 560041

Room 102, No.3 Zhongyi Feihe Street, Panyu District, Guangzhou

Room 102, No. 9, Zhenhua Road, Lecong, Shunde District, Foshan City, Guangdong Province

• Web:https://www.chinatoindiaddp.com/

Thank you for reading. I look forward to further communication with you!

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