What Is Cargo Insurance?

Cargo insurance provides financial protection for goods while they are being transported from one place to another. Whether your cargo is moving by road, rail, sea, or air, cargo insurance helps protect against loss, damage, or theft during transit.

It is an essential coverage for businesses that ship, receive, or trade goods domestically or internationally.

Who Is Cargo Insurance For?

Cargo insurance is suitable for a wide range of businesses and individuals involved in the transportation of goods, including:

• Importers and exporters

• Manufacturers and distributors

• Wholesalers and retailers

• Freight forwarders and logistics companies

• Trucking and transport operators

• E-commerce businesses shipping products to customers

If your business relies on moving goods, cargo insurance helps reduce financial risk and protect cash flow.

What Does Cargo Insurance Cover?

Cargo insurance can be tailored to your needs, but typically covers:

• Loss or damage to goods during transit

• Theft or non-delivery

• Fire or explosion

• Accidents involving the transporting vehicle or vessel

• Weather-related damage (such as storms or rough seas)

• Loading and unloading risks (depending on policy terms)

Coverage can be arranged for:

• Single shipments

• Annual or open policies covering multiple shipments

• Domestic or international transit

Optional extensions may be available depending on the type of cargo and route.

Why Cargo Insurance Is Important

Carriers’ liability is often limited and may not fully cover the value of your goods. Cargo insurance ensures that your business is protected from unexpected losses that could otherwise be costly or disruptive.

With the right policy in place, you can ship with confidence knowing your goods are financially protected from origin to destination.

Common Cargo Insurance Underwriting Questions

To arrange cargo insurance, insurers typically ask the following questions to assess the risk:

• What type of goods are being shipped?

• What is the total value of each shipment?

• How frequently do you ship goods?

• What is the origin and destination of the cargo?

• What mode of transport is used (road, sea, air, rail, or a combination)?

• How is the cargo packaged and secured?

• Who is responsible for the goods during transit?

• Are shipments new, used, or refurbished goods?

• Have you experienced any cargo losses or claims in the past?

• Is temperature control or special handling required?

Providing accurate information helps ensure appropriate coverage and smoother claims handling.

Protect Your Goods in Transit

Cargo insurance helps safeguard your business against the unexpected. Whether you ship occasionally or every day, the right coverage can protect your goods, your finances, and your peace of mind.

State Filings and Regulatory Requirements

Cargo insurance requirements can vary depending on your business operations and location. In some cases, state or federal filings may be required to comply with regulatory standards.

Depending on your operation, insurers or brokers may need to file or verify:

• State insurance filings where coverage is written

• FMCSA filings (such as BMC-34 or BMC-83) for regulated motor carriers

• Certificates of insurance naming shippers, brokers, or authorities

• Proof of coverage to meet contractual or licensing requirements

Your insurance provider can help determine whether filings are required for your business and ensure all documentation is completed correctly and on time.

Does Cargo Insurance Cover Equipment Breakdown?

Standard cargo insurance does not automatically cover equipment breakdown. Cargo policies are designed to protect the goods being transported, not the mechanical or electrical failure of equipment.

However, coverage may be available in certain situations:

• Cargo damage caused by equipment failure (such as refrigeration failure) may be covered if specifically endorsed

• Refrigeration or temperature-controlled cargo often requires additional coverage and underwriting review

• Equipment breakdown insurance is typically a separate policy designed to cover repair or replacement of machinery, vehicles, or mechanical systems

If your business relies on specialized equipment—such as refrigerated trailers, cranes, or loading machinery—it’s important to discuss additional coverage options to avoid gaps in protection.

Important Coverage Considerations

Cargo insurance policies can vary by insurer and jurisdiction. Coverage depends on:

• Policy wording

• Endorsements added

• Type of cargo

• Mode of transport

• Regulatory requirements

Always review policy terms carefully to ensure your coverage aligns with your operational and compliance needs.