Guide
What cargo insurance does not cover
Updated
Cargo policies are broad and their exclusions are specific. Four of them account for most declined claims, and three are within a shipper's control before the goods move.
Inadequate packing
A standard exclusion, and the one most often argued. Cover assumes goods packed adequately for the transit they are undertaking, which is a higher standard than packing adequate for a truck across town.
It is also the factor you most directly control. Proper export packing lowers the premium and removes the argument at claim.
Inherent vice
Loss arising from the nature of the goods themselves, such as produce that deteriorates, rather than from an external event. Perishables and moisture-sensitive goods are where this bites.
Where the exposure is real, ask whether the cover can be extended and on what conditions, rather than assuming the general policy answers it.
Delay
Financial loss caused by cargo arriving late is generally excluded even where the delay itself was caused by an insured peril. This surprises shippers whose real exposure is a missed selling season rather than a damaged box.
If timing is the risk, that is a different conversation and possibly a different product.
Storage after transit
Transit cover ends a set period after discharge. Goods sitting in a destination warehouse are frequently outside it and need separate cover.
Ask how long cover continues after discharge and what happens if clearance is delayed, because detention and demurrage will be accruing at the same time.