Marine Cargo Insurance Basics

Author: Nelson Cabrera

Marine cargo, or ocean freight, is defined as goods commercially transported by ship. Almost all marine cargo is shipped in containers. Container shipping is one of the most efficient and economical ways to ship goods. Cargo usually consists of tangible goods or produce to sell, but can also be pharmaceutical, animals, cars, oil, seafood, equipment, or just about anything that you can think to ship. Marine cargo insurance is designed to offer financial protection for importers and exporters delivering goods overseas.

Marine insurance is the oldest type of insurance in the world. Some policies are grouped to cover ground transit, air freight, and ocean cargo shipping. Marine cargo insurance is a subdivision of marine insurance. Cargo insurance is generally separate from insurance covering the vessel and even the hull of the ship can have its own policy.

Marine cargo insurance is generally purchased by the person or company shipping the goods overseas. Policies can cover the cargo while it is actually being shipped. Some policies cover cargo after it reaches the port and is being unloaded or warehoused in different locations. More extensive coverage can cover the importer and the exporter, covering taxes that are incurred even if a shipment is damaged or lost.

Expanded specialty insurance can be added for an additional premium. One common specialist policy that is added is a war risk policy. Ships sailing into war zones or areas known for piracy may not be covered by their normal policy while in the high risk area. A war risk policy can be added on if your shipment is going to be travelling through one of these areas.