What Does Marine Freight Insurance Cover? A Plain-English Guide

Goods that travel by sea can be lost, dropped or damaged long before anyone at either end has done anything wrong. A container can go overboard, a ship can run aground, water can get into a hold. Your freight forwarder carries the goods, but the law limits what a carrier pays for — and those limits are often a fraction of what the cargo is actually worth.

That gap is what marine freight insurance is for. It is a policy you take out on the goods themselves, covering them door to door while they are in transit.

What it covers

A standard policy pays out if your goods are physically lost or damaged by things like sinking, stranding, collision, fire, heavy weather, water damage, jettison and theft. Most policies run from the moment the goods leave the warehouse at origin to the moment they arrive at theirs, not just the sea leg.

What it does not cover

Insurers exclude ordinary wear and tear, poor packing, delays (in most cases) and inherent vice — goods that damage themselves, like fruit ripening or metal rusting. War risks and strikes are usually excluded too, but can be added back for an extra premium. Read the exclusions before you buy, not after.

Institute Clauses in plain terms

UK cargo policies are usually built on Institute Cargo Clauses. Clause (A) is the widest cover — all risks of loss or damage, minus the exclusions. Clause (B) covers named perils such as fire, stranding and washing overboard. Clause (C) is the narrowest and cheapest, covering a short list of major casualties only. For most commercial cargo, (A) is the sensible default.

How claims are valued

Cover is normally arranged on CIF value plus ten per cent — the invoice cost, the insurance and the freight, plus a tenth for your trouble. If you under-declare to save premium, the insurer can reduce the payout in proportion, so declare the real value.

Getting a quote

To price a policy we need the commodity, the packing, the route, the container type and the values involved. Send those over and we will come back with a quote, usually the same day. If you are unsure which clause suits your cargo, ask — that is what we are here for.