Ocean cargo. Import and export
Sea freight insurance: what it costs and what it actually covers
Most shippers discover the difference between carrier liability and cargo insurance during a claim, which is the worst possible time. Carrier liability is capped, usually by weight rather than by value, so a pallet of electronics and a pallet of sand can carry the same limit. Cargo insurance is a separate purchase priced on the value, the route and how the goods are packed. This page sets out what drives the premium and the two exposures that surprise people most.
General average
a shared loss principle that can bill you even when your cargo is undamaged
Detention clock
storage and demurrage run while a claim is being sorted out
The process
- Tell us the cargo, the route and how it is packed. Two minutes, no account.
- We pass your details to brokers who place marine cargo risks, and to no one else.
- They quote you directly. We place no insurance and give no advice on which cover to take.
Freight Insurance Cost is an independent site operated by Ellul Solutions Ltd. It is not affiliated with, endorsed by or connected to any agency or company named here, and nothing on it is legal, customs, regulatory or trade advice. We take no commission and carry no paid placements. No premium or rate is published on this site because marine cargo cover is priced individually on commodity, value, route, packing and claims history. Carrier liability limits are terms of the carriage contract and of the applicable convention; read the bill of lading rather than relying on any summary, including this one. Regulatory positions are summarised from the agencies' own pages on the date shown and are a starting point for your own enquiries, not a substitute for them.
What drives a marine cargo insurance premium, and what it does not cover, 2026
Last updated
Cargo insurance is priced on a small number of factors and declined on a smaller number of exclusions. This table sets out both, so a quote can be read against the exposure it is meant to answer.
This table describes how marine cargo cover is structured and rated. It quotes NO premium or rate, because cargo insurance is priced individually on commodity, value, route, packing and claims history, and no public source sets a market rate. Carrier liability is described as commonly limited by weight; the actual limit is a term of the carriage contract and of the applicable convention, which is why the table directs you to read the bill of lading rather than asserting a figure. Detention and demurrage are referenced because they continue accruing during a claim; the Federal Maritime Commission has issued a final rule on billing practices for them. Nothing here is insurance or legal advice.
| Factor | Effect on premium | Why | What to ask, in writing |
|---|---|---|---|
| Commodity | Up for high value or fragile | Theft attractiveness and damage susceptibility | Is my commodity inside your appetite at all? |
| Declared value basis | Sets the sum insured | Cost, insurance and freight plus a margin is common | Is the sum insured invoice value, or invoice plus a percentage? |
| Packing | Down for proper export packing | Inadequate packing is a standard exclusion | Would my packing be treated as adequate for this cover? |
| Route and transhipment | Up with transhipments and risk ports | More handling, more exposure | Does the cover follow transhipment and storage in transit? |
| Cover level | Institute clauses A to C narrow progressively | C covers named perils only | Which clauses am I being quoted on? |
| Claims history | Up after losses | Pattern rather than luck | How many years of history do you want? |
| Storage at either end | Often excluded beyond a period | Transit cover is not warehouse cover | How long does cover continue after discharge? |
- Carrier liability is commonly limited by weight rather than by the value of the goods, so a high value pallet can carry the same cap as a low value one.
- Inadequate packing is a standard exclusion in marine cargo cover, which makes packing one of the few premium factors a shipper directly controls.
- Institute Cargo Clauses narrow progressively from A to C, with C covering named perils only, so two quotes on different clauses are not comparable.
- Transit cover generally ends a set period after discharge, so goods sitting at a destination warehouse may be outside it.
- General average can require cargo owners to contribute to a shared loss even where their own goods are undamaged.
Cite this page
“What drives a marine cargo insurance premium, and what it does not cover, 2026”, Freight Insurance Cost, https://freightinsurancecost.com/ (updated 2026-08-15). This table describes how marine cargo cover is structured and rated. It quotes NO premium or rate, because cargo insurance is priced individually on commodity, value, route, packing and claims history, and no public source sets a market rate. Carrier liability is described as commonly limited by weight; the actual limit is a term of the carriage contract and of the applicable convention, which is why the table directs you to read the bill of lading rather than asserting a figure. Detention and demurrage are referenced because they continue accruing during a claim; the Federal Maritime Commission has issued a final rule on billing practices for them. Nothing here is insurance or legal advice.
Related guides
Each one cites where its numbers come from.
Carrier liability is not cargo insurance
Carrier liability is capped, usually by weight, and requires proving fault. Cargo insurance is a separate purchase. Why the difference matters at claim.
What cargo insurance does not cover
Packing, inherent vice, delay and war are the standard exclusions. What each means in practice and which are buyable back.
General average: billed for a loss that was not yours
If a vessel sacrifices cargo or incurs extraordinary expense to save the voyage, all cargo owners contribute. What it means and why insurance matters.
Questions, answered directly
Is my cargo covered by the carrier?
Not in the way most shippers assume. Carrier liability is limited by the contract of carriage and the applicable convention, and the limit is commonly expressed by weight rather than by value, so a high value pallet can carry the same cap as a low value one of the same weight. It is also fault-based in practice. Cargo insurance pays on the terms of the policy without you having to establish anyone's fault first, which is why it is a separate purchase.
What drives the cost of sea freight insurance?
Commodity, declared value, packing, route and transhipments, the level of cover, and claims history. We publish no rate, because cargo insurance is priced individually against those factors and no public source sets a market rate. Packing is the factor a shipper most directly controls: inadequate packing is a standard exclusion, so proper export packing both lowers the premium and removes an argument at claim.
What are Institute Cargo Clauses A, B and C?
Standard sets of cover that narrow progressively. C covers named perils only, B is broader, and A is the widest. Two quotes written on different clauses are not comparable, so ask which you are being quoted on before you compare prices. It is one of the most common false comparisons in this market.
What is general average?
Where an extraordinary sacrifice or expenditure is made to save a common maritime adventure, the loss is shared between all interests in proportion to value. If containers are jettisoned or a salvage is mounted, every cargo owner contributes, and your goods can be undamaged and you can still owe money. Security is demanded before cargo is released; an uninsured owner posts it themselves, an insured one hands it to their insurer.
Does cargo insurance cover delay?
Generally not. Financial loss caused by late arrival is usually excluded even where the delay was caused by an insured peril. That surprises shippers whose real exposure is a missed selling season rather than a damaged box. If timing is the risk you are trying to manage, it is a different conversation and possibly a different product.
How long does cover last after the ship arrives?
Transit cover generally continues for a set period after discharge and then stops, so goods sitting in a destination warehouse may be outside it. Ask how long that period is and what happens if customs clearance is delayed, because detention and demurrage will be accruing over the same window and the Federal Maritime Commission has issued a final rule on how those are billed.
What should I do the moment damage is found?
Note it immediately and observe the notification and suit time limits in the carriage contract, which are short and unforgiving: missing them ends a claim against the carrier regardless of merit. Photograph the cargo and the packing before moving anything, keep the packaging, and notify both the carrier and your insurer. Damage found on unpacking a week later is a common way to fall outside the window.