What cargo insurance do I need to protect my goods during transport?

Many importers assume that if cargo is damaged or lost, the carrier is responsible for everything. In practice, carrier liability is limited and is usually significantly lower than the actual value of the goods. That is why cargo insurance exists to protect your investment throughout the entire journey, whether by vía marítima or air.

What Cargo Insurance Covers

Depending on the policy, it can cover total or partial loss, damage from accidents, fire, theft, vessel sinking, or vehicle rollover, among other risks. The exact coverage depends on the conditions you contract.

The Three Most Common Coverages (Clauses A, B, and C)

In international transport, the Institute Cargo Clauses are typically used:

Clause	Scope	Recommended For
A ("All Risk")	The broadest, covers any loss or damage except what is explicitly excluded	High value or fragile goods
B	Covers a defined list of risks (fire, shipwreck, rollover, earthquake)	Medium value cargo
C	The most basic: only major casualties like fire, stranding, or sinking	Low risk cargo and tight budgets

How Much to Insure

Standard practice is to insure the CIF value of the goods (Cost, Insurance, and Freight) plus a margin, commonly 10%, to cover additional expenses. Insuring only the invoice value can leave you with inadequate compensation. 

Insurance and Incoterms Who Purchases It

The Incoterm agreed upon with your supplier determines who must arrange insurance:

• At CIF and CIP, The seller purchases the insurance (with different minimum coverages in each case).
• At EXW, FCA y FOB, Insurance is the buyer's responsibility.

Even when the seller arranges the insurance, it is advisable to verify that the coverage is sufficient for your needs.

What is Typically Excluded

Defective packaging, inherent vice (nature of the goods), natural wear and tear, delays, and certain risks like war or strikes (which can sometimes be added as extra clauses). That is why proper packaging and reading the policy exclusions are vital.

Single Shipment vs. Open Policy

If you import occasionally, a single shipment policy is usually enough. If you import frequently, an annual open policy simplifies the process and can be more economical.

What to Do in Case of a Loss

Keep the invoice, packing list, transport document, and photos of the damage, and notify your agent and the insurance company immediately.