Cargo insurance is the policy covering your goods during international transport. It is not the same as the carrier’s liability: that is capped by international conventions at amounts per kilo that rarely come close to the real value of what you are moving.
What it covers and what it does not
Cover ranges from named perils to “all risks”, which does not cover everything either: inadequate packing, inherent vice of the goods and certain events are excluded or bought separately. The minimum cover an incoterm like CIF requires is usually the most basic one, and the seller buys it, not you.
Why it matters when importing from China
Whenever the value of a shipment would hurt if it were lost. A container can go overboard, get wet, face a fire on board or be damaged in handling, and there is a maritime principle, general average, under which all cargo owners on a vessel in distress contribute to the salvage costs, whether or not their own goods were damaged. Without insurance, that contribution comes out of your pocket.
The common mistake
Assuming the cargo “is insured” because the incoterm mentions insurance, or believing the carrier answers for the value of the goods. Buy your own policy when the value justifies it, check what it covers and its deductible, and for high-value cargo consider transit monitoring as well: insurance repairs the financial damage, monitoring helps you avoid it.
We can advise on the right cover for your operation. Write to us before your next shipment.
