Why is marine cargo insurance necessary?

Marine cargo insurance is one of the most misunderstood and under-purchased products in freight. Here is why it actually matters:

What carriers' liability actually covers (very little):

• Hague-Visby Rules (sea): Limited to ~SDR 2.00 per kg or ~SDR 666.67 per package — whichever is higher. For a 500 kg shipment worth $10,000, carrier liability may be capped at $1,400.
• Warsaw/Montreal Convention (air): Limited to approximately SDR 19/kg (~$26/kg)
• Your $10,000 cargo could be compensated at only $1,400 under carrier liability rules

Real risks cargo insurance covers:

• Sinking, fire, flooding, collision (total loss — rare but real)
• Theft at ports and warehouses (common on certain trade lanes)
• Container moisture damage (condensation causes significant damage)
• Improper handling during transshipment
• General Average (your cargo held hostage if another party's goods cause the ship to divert)

Cost vs risk:
Cargo insurance typically costs 0.3–0.8% of CIF value. On a $10,000 shipment, that's $30–80 for the voyage. The expected value of that insurance (probability × loss) almost always exceeds the premium cost.

Our recommendation: Always insure. Use the <a href="https://calculatecbm.com/cargo-insurance">cargo insurance calculator</a> to estimate your premium.