Cargo Insurance

Every business that makes or trades in physical products needs some form of cargo insurance, yet all too often importers and exporters tell their brokers that they’ve already got it covered.

When their storage and distribution needs are catered for by commercial combined policies, many businesses simply relinquish control of the insurance of imports and exports, leaving it to suppliers or freight forwarders.

Our specialist underwriters help brokers to explain the pitfalls of this approach, securing better cover for their clients while also saving them money. Further benefits are achieved by packaging the import, export, storage, and distribution risks into one ‘stock throughput’ policy.

Where exporters need certificates of insurance to comply with Incoterms requirements, particularly where ‘Letters of Credit’ are involved, our online NMU Certs system gives them the ability to produce electronic certificates in-house.

Who needs cargo insurance?

Cargo Insurance is required by any business that manufactures or buys or sells finished products, components or raw materials.

What does cargo insurance cover?

Cargo insurance covers all risks of physical loss of or damage to goods during transit, imports, exports and domestic carriage, including any incidental storage. Storage outside the ordinary course of transit can be added as an extension to a cargo insurance policy where both purchases and sales are covered.

Terrorism cover is only given during transit, and war risks are only covered during sea or air carriage.

What does cargo insurance not cover?

Consequential losses are not normally covered; but can sometimes be added, for example to cater for loss of market subsequent to insured loss of or damage to seasonal goods.

Non-fortuitous losses are not covered under a cargo insurance policy.

Are there any geographical restrictions?

Cargo insurance is generally available to or from ports or places worldwide; however

  • terms and conditions may vary for countries where there are higher than normal risks of war or terrorism, for example Iraq and Afghanistan;
  • cover may not be available where trade is subject to international sanctions, for example Iran, Syria and North Korea;
  • cover may not be available for the inland leg to or from the port in countries where the infrastructure is poor or where there is an unacceptable theft risk, for example to or from certain land-locked African countries;
  • some countries require buyers there to insure imports in local insurance markets or with state insurance corporations.

What should buyers look out for?

Problems sometimes arise where buyers or sellers don’t arrange their own insurance, relying instead on:

  • their suppliers or customers arranging cargo insurance, or
  • a freight forwarder arranging insurance for them.

Those who think that carriers will pay for loss or damage may be surprised that contracts of carriage, generally limit the liability of the carrier and can exclude it altogether in circumstances beyond their control.

For more information about cargo insurance, contact your local NMU cargo insurance specialist.

Post Magazine 360 survey ‘Best for Marine and Transport’ in 2011. Post Magazine Underwriting Service Awards ‘Transport and Cargo Team of the Year’ winners in 2012, 2014, 2015 and 2016.


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