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What are the basics of Cargo Insurance?

Current policies are usually designed for the frequent shipper. They automatically cover approved merchandise that assureds are obliged to insure under terms of sale. This eliminates the need for the importer or exporter to negotiate terms, conditions, rates, and limits for each shipment insured. Under an open cargo policy, goods can be insured “ALL-RISK”, Free of Particular Average (FPA) or With Average (WA). These coverage variations are explained below.


The broadest form of coverage is “ALL-RISK”. An “ALL-RISK” policy insures approved general merchandise in the event of physical loss or damage from any external cause. This includes new, packaged goods without unusual susceptibility to loss from breakage, pilferage, or the nature of the goods themselves. “ALL-RISK” policies do not cover all losses possible in the course of an international shipment.

Typical exclusions in an “ALL-RISK” Policy are:

1. Improper packing

2. Abandonment of cargo

3. Rejection of goods by customs

4. Failure to pay or collect accounts

5. Inherent vice (infestation or loss due to the nature of product itself)

6. Employee conversion or dishonesty

7. Losses due to delay or loss of market

8. Losses in excess of policy limits

9. Losses at port city more than 15 days after discharge of cargo

10. Losses inland more than 30 days after discharge of cargo

11. Losses in South America more than 60 days after discharge of cargo

12. Barge shipments

13. Goods subject to an on-deck bill of lading

14. Losses caused by temperature or pressure (air shipments)

15. Failure to notify air carrier of preliminary loss in timely fashion:

        a. Obvious damage – 7 days

        b. Hidden damage – 14 days

        c. Non-delivery – 120 days

16. Used goods

Bill Voss
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Aggressive policyholder attorney that fights hard for his clients and won't stop until he wins.
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The Voss Law Firm, P.C. represents clients on a local, national and international basis. We proudly serve companies and individuals along the Gulf Coast and around the globe on a contingency fee basis. Our law firm collects nothing unless we recover on our client's behalf.

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