The main cover you need is marine cargo insurance, which protects the goods against loss or damage in transit. For chemicals, most importers choose the widest standard terms, Institute Cargo Clauses (A), and then check the exclusions that matter for their product.
You may also need liability cover, because a leak or spill can cause damage and clean-up costs far beyond the value of the goods.
The three standard levels of cargo cover
- Institute Cargo Clauses (A) cover all risks of loss or damage, except those specifically excluded.
- Institute Cargo Clauses (B) cover a list of named events, such as fire, sinking, collision and water entering the container.
- Institute Cargo Clauses (C) cover a shorter list of major events only, and leave out many common transit losses.
Who arranges it under each Incoterm
Under FOB and other F terms, you arrange and pay for insurance from the point you take the risk. Under CIF, the seller must insure, but Incoterms 2020 require only the minimum cover of Institute Cargo Clauses (C). Under CIP, the seller must provide the wider Clauses (A) level. Both CIF and CIP require cover for at least 110% of the contract value.
If you buy CIF, ask whether the seller's cover is (A) or (C), and who the claim would be paid to. Many buyers arrange their own policy instead. The trade-offs are covered in FOB, CIF or DAP.
Exclusions that matter for chemicals
- Insufficient or unsuitable packing is excluded under the standard clauses. Poor or wrong packaging can void a claim for leakage.
- Inherent vice, meaning damage caused by the nature of the goods themselves, such as a product that degrades in heat, is excluded unless specifically covered.
- Contamination may need specific wording, especially for bulk liquids in ISO tanks or flexitanks.
- Ordinary leakage and loss of weight are often excluded unless the policy says otherwise.
- Undeclared or mis-declared dangerous goods can void cover. Declare DG cargo correctly to both the carrier and the insurer.
Beyond cargo cover
A chemical shipment can cause harm to others. A leaking container may damage other cargo, the ship or a port, and lead to clean-up costs. General average may also apply after a vessel incident, where all cargo owners share the cost of saving the voyage. Ask your insurer or broker about general average, third-party liability and pollution cover for your products.
Insurers also want to know the product, its UN classification and the packaging. Give them the SDS and the DG classification when you ask for cover.
Making a claim work
Insurance pays only with evidence. Keep the survey and loading reports, photos and seal numbers, and note any damage on the delivery receipt. Notify the insurer quickly. Policy wording varies, so confirm your cover with a cargo insurance broker. We do not sell insurance.
Next step
We document packaging, loading and seals at the factory, which supports any insurance claim. To start, book a free sourcing review.