Cargo insurance is a type of insurance that covers goods and merchandise while they are being transported. It protects the cargo owner against loss or damage due to various risks during transit—by land, sea, or air.

Types of Cargo Insurance:

1. Land Cargo Insurance – Covers goods transported overland by truck or train. Common in domestic shipping.
2. Marine Cargo Insurance – Covers goods shipped by sea or air. It’s often used in international trade.

Common Coverage:

• Theft
• Loss
• Damage from accidents Natural disasters (storms, earthquakes, etc.)
• Piracy (in marine transit)

Policy Options:

• All-risk coverage – Broad coverage

Policy Options:

• All-risk coverage – Broad coverage for most perils (subject to exclusions).
• Named perils – Covers only the risks specifically listed in the policy.
• Open policy – For businesses that ship regularly; covers all shipments within a time frame.
• Single shipment policy – For one-time or occasional shipments.

Why It’s Important:

Even with careful handling, cargo can be lost or damaged. Carriers have limited liability, especially in international shipping (e.g., under the Hague-Visby Rules or Warsaw Convention), so cargo insurance ensures better protection for the owner.