Cargo Insurance (Marine Insurance)
Insurance coverage for physical loss or damage to goods during international transportation.
In detail
Marine cargo insurance protects against physical loss or damage during transit. Coverage is defined by Institute Cargo Clauses (ICC): Condition A (All Risks) — broadest coverage, excluding war and nuclear risks; Condition B — named perils only; Condition C — minimum coverage (major casualties only). Condition A is the standard recommendation for commercial shipments. Insured value: typically 110% of CIF value (the extra 10% covers expected profit). Cost: 0.1–0.5% of insured value for ocean; 0.3–1.0% for air. When CIF terms are used, the seller provides insurance, but only at minimum Condition C coverage — insufficient for most commercial purposes. Recommendation: always arrange your own Condition A cargo insurance regardless of Incoterms. In the event of a claim: immediately document damage with photographs, obtain a survey report from a local surveyor, notify the insurance company within 24–48 hours, and prepare a commercial act with the carrier. Keep insurance certificates for 3+ years.
Examples
- →$100,000 CIF value × 110% × 0.2% Condition A rate = $220 premium for full all-risk coverage
Related terms
CIF (Cost, Insurance and Freight)
Incoterms 2020 rule: seller pays freight and provides minimum insurance to the named destination port, but risk transfers to the buyer at the port of loading.
FOB (Free on Board)
Incoterms 2020 rule: seller is responsible until goods are loaded on board the vessel at the named port; all risk and cost pass to the buyer from that moment.
FCL (Full Container Load)
A shipment occupying an entire ocean container — 20DC, 40DC, or 40HC — booked and sealed by one shipper.