What is Cargo Insurance?
Cargo insurance provides financial protection against loss or damage to goods while they are being transported by air, sea, road, or rail. It safeguards businesses and individuals involved in domestic and international trade.
Why is Cargo Insurance Important?
- Goods in transit are exposed to theft, fire, accidents, collisions, natural disasters, and mishandling.
- Without insurance, the complete financial loss is borne by the shipper or owner.
- Many international trade agreements require cargo insurance.
Types of Cargo Insurance
- Marine Cargo Insurance – Covers goods transported by sea or inland waterways.
- Air Cargo Insurance – Covers goods shipped by air.
- Land Cargo Insurance – Covers goods transported by road or rail.
Coverages Offered
- Loss or damage due to accident, fire, or collision
- Theft, burglary, or piracy (marine transit)
- Natural calamities such as flood, storm, and earthquake
- Loading and unloading related damages
- General average losses during sea transport
What is Not Covered?
- Deliberate damage by the owner
- Poor packaging or leakage
- Normal wear and tear
- Transit delay without physical damage
Example
If textiles worth ₹50 lakh are shipped from India to Europe by sea and the cargo is damaged due to seawater entry, the cargo insurance policy will cover the financial loss up to the insured value.
Benefits of Cargo Insurance
- Protects businesses from heavy financial losses
- Ensures smooth international trade operations
- Builds trust with customers and partners
- Fulfills legal and contractual obligations
