Cargo & Freight Insurance; Air, Rail & Sea

Cargo or freight insurance is designed to provide a protection against risk of loss or damage to goods from external sources during shipping. The shipping methods include land, sea or air, covering all aspects of transport methods.

Damage protection ensures your goods are covered against risks including but not limited to: flood, theft, fire, and poor handling. The type of policy you take out will dictate what exactly your cargo insurance covers you for.

Cargo insurance is also commonly known as cargo marine insurance as this directly indicates the cover of goods being transported by boat. However, this can be misleading as it also refers to any cargo or freight being transported over air, road or rail.

What Will My Policy Cover?

Ultimately the level of cover your cargo insurance has is up to, and we’ll always make sure you’re never paying for more cover than you need. However just as a reference, a standard policy would cover the moving of goods between warehouses and other warehouses, suppliers, or wholesalers. This coverage can be worldwide.

Some examples of the types of goods you can cover are:

  • Raw materials
  • Foodstuff
  • Chemicals
  • Minerals
  • Steel
  • Rubber
  • Furniture
  • Clothing
  • Building Materials
  • Medical Supplies
  • And more.

Other uses include:

  • Goods in Transit
  • Commercial or Domestic Goods
  • Annual or Single Shipment Policies
  • Imports / Exports
  • Worldwide Transits
  • Exhibitions
  • Stock Throughput
  • Project Cargo (equipment for specific projects)

For any business owner, the goods that you are manufacturing and or just transporting are the essence of your business and vital to your bottom line. This means those goods arriving in one piece is crucial.

Once you have handed over your goods for shipment however, the amount of control you have over them can be limited, which means you cannot ensure that they’ll arrived safely. If you don’t have the right level of business insurance cover which includes cargo insurance, you’re likely not going to be able to claim compensation for the damaged goods, leaving you and your bottom line out of pocket. Your cargo insurance cover will protect you against these losses should your goods become damaged during shipment.

At Be Wiser Business Insurance, we have policies to suit every kind of business and their needs. So, whether you are transporting goods from one place to another or are responsible for the physical shipping of these items, we can help find the right policy for you. For a free and no obligation quote for your business, simply call us today on 0333 999 0802. You will speak to one of our certified advisors who will ask a few questions about your business and goods that you transport and discuss the options available to you.

Cargo & Freight Insurance

When deciding the value of the cover you need when taking out a policy, the following is recommended: take the cost of goods, plus the cost to ship them, then add on an additional 10% of those combined values to cover any administration costs in the event of a claim such as the excess. This total will give you a level of cover appropriate for your cargo. For example:

Cost of Goods = £20,000

Shipment Costs = £1,000

Combined Cost = £21,000

Additional 10% = £2,100

Total = £23,100 – This is the value of cover recommended for your cargo insurance policy.

According to The London Institute of Underwriters, there are specific clauses for cargo insurance that policies will fall under: Institute Cargo Clauses A, Air, B and C

  • Clause A covers all kinds of risks including physical loss or damage to the cargo from any external cause and salvage charges. There are exclusions such as poor packaging of goods, shipping to high risk areas or where there are sanctions in place e.g North Korea.
  • Clause Air is the same as all the risks in Clause A but is specific for goods transported by aircraft.
  • Clause B and Clause C provide cover against certain perils and should only be used for commodities in bulk shipments.

There are additional clauses available to address strikes by the workforce or being involved in a war conflict. So if your cargo falls under these conditions, you will need to include this clause in your policy.

Policy Exclusions

Policyholders must be aware of the exclusions prior to purchasing insurance as this will not be included in Clause A and will make the policy void if you wish to make a claim. The exclusions are:

  • Caused by poor packing or preparation of the cargo
  • As a result of ordinary leakage and wastage
  • Due to insolvency or financial default of the owners, charterers or operators of the vessel
  • Caused by the tendency of a product to deteriorate over time. For example, fruit will go rotten
  • Caused by delay
  • Resulting from employee strikes
  • Due to the poor state of the vessel

Freight Forwarders Insurance and Liability

Freight forwarders are those logistic companies that are transporting goods on behalf of another company. They have the means of transportation such as bikes, vans or trains and they act as the ‘middle man’ between getting those goods to its final destination, whether it is just in the UK or overseas too.

Liability cover and insurance is not automatically offered to the customer when they are shipping goods (Source: Gov.uk). However, companies can usually choose to add this when they are transporting items with a freight forwarder. Adding insurance can be considered a good way to automatically add value for the customer and since you are likely to be liable for any damages, it should be essential.

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Our specialist teams are experts in all levels of cargo and freight insurance, working with the UK’s leading policymakers to compare quotes and get you the cover you need at the best possible price.

You can speak to our team right now by giving us a call, or if now isn’t convenient, request a call back and the team will be in touch at a time to suit you. Alternatively you can search for a quote online.