Marine cargo insurance covers loss of or damage to your goods while they travel, usually from the supplier's warehouse to yours. For most agri shipments it is worth it, because the shipping line's liability is limited by law and rarely covers the full value of the cargo.
This is general guidance, not insurance or legal advice. Policy wording decides what is covered, so read it or ask a cargo insurance broker.
Who buys it
Your Incoterm decides. Under CIF and CIP the seller must buy insurance for your benefit. Under Incoterms 2020, CIF only requires minimum cover, while CIP requires wider cover. Under FOB, CFR and most other terms, the buyer arranges its own insurance. See what FOB Mundra or CIF Rotterdam include.
Many importers prefer to buy their own cover even on CIF, so the policy, insurer and claims process are under their control. A supplier's CIF policy may also have a claims agent you do not know, in a country you do not trade in. Regular importers often take an annual open cover, which insures every shipment automatically under one policy.
Levels of cover
- Institute Cargo Clauses (A): the widest standard cover, often called all risks, with listed exclusions.
- Institute Cargo Clauses (B): named risks, including some water damage.
- Institute Cargo Clauses (C): the narrowest, mainly major casualties such as fire, sinking or collision.
- Common add-ons: war and strikes cover, and warehouse-to-warehouse extensions to your own site.
What is often not covered
- Inherent vice: spoilage caused by the nature of the goods, such as mould from cargo loaded too wet.
- Insufficient or unsuitable packing.
- Delay, and loss of market.
- Ordinary loss of weight in transit, which is normal for dry agri goods.
- Quality problems that were present before loading, such as pesticide residues.
Is it worth it?
Yes, for most buyers. A container can be lost, dropped or flooded, and in a general average event you may have to post security before your cargo is released, even if your goods are undamaged. Insurers usually provide that guarantee for you. Without cover, you pay it yourself, and your goods may wait at the port until you do.
But insurance is not a substitute for good loading. Condensation damage is often argued as inherent vice or poor packing. Loading photos, moisture results and a clean container record make a claim far easier, as explained in what happens if goods are damaged at sea.
How we help
We do not sell insurance. We provide the loading report, moisture results and photos that support a claim, and check the insurance certificate if the supplier insures under CIF. We also check that the insured value and cover match the contract. Ask for a free sourcing review.