Our Services

We take the next STEP UP to create more value for our customers and partners


Cargo Insurance

Cargo Insurance provides coverage against all risks of physical loss or damage to freight during the shipment from any external cause during shipping, whether by land, sea or air. Also, known as Freight/marine Insurance, it covers transits carried out in water, air, road, rail, registered post parcel, and courier.

Cargo insurance is important in international trade

Generally, all carriers must carry a minimum amount of insurance, known as carrier Limited liability. However, carrier liability provides very limited coverage, and anything from natural disasters to vehicle accidents or even acts of war could damage your cargo.

Therefore, shippers/consignee's need to arrange for cargo insurance to protect their goods from loss, damage, or theft while in transit.

Why cargo insurance is important?

Your freight could be lost, stolen/pilfered, dropped or damaged during transit. You need to have insurance to protect your cargo. Whether it is an All Risk, with Average or Total Loss Insurance.

Our logistics liability, as a transportation intermediary is limited, and is subject to the limits shown in our Terms of Conditions and it is as per regulations of the industry by various conventions.

Types of Cargo Insurance -

Cargo insurance can be taken for international as well as domestic transportation. At the same time, this is really difficult to standardize and control without the proper cooperation from countries and states due to the varying nature of this insurance

    Under these variations, this insurance can be categorized into following classifications:-

  • Land Cargo insurance
  • Marine Cargo insurance

Marine Cargo Insurance policies:

  • Renewable policy.
  • Permanent policy.
  • Specific Cargo Policies.
  • Open Cover Cargo Policies.

Renewable policy is required for a particular value requiring renewal after policy expiration. Most of the single trip or voyages fall under this category. Permanent policy can be drawn up for a decided time period permitting countless shipments in that period.

  • Specific Cargo Policies :

    When a company approaches an insurance company or broker for insuring a particular consignment, then it can fall under the category of specific cargo policies. These policies are also termed as voyage policies because only shipments are covered under them.

  • Open Cover Cargo Policies :

    When insurance holder opts for coverage against various consignments, then open cover cargo policies get activated.

Cargo Insurance Guidelines

The decision of whether or not to insure your freight is not always a clear-cut, simple choice. There are many factors to consider, such as the total value of the goods shipped, the shipping origin and destination, the mode of transportation, etcetera.

  • Once the determination is made, the next question is how to insure the shipment.
  • To assist you in your evaluation, the options below outline the types of coverage available. Cargo insurance covers transits carried out in water, air, road and rail.

Following aspects are covered under the benefits of this insurance:

  • All Risk Coverage This coverage provides extensive protection against damage or loss due to external factors. Though, this is called all risk coverage but still, people should know the aspects included and excluded in the policy before insuring the marine insurance.


  • If you choose not to insure your shipment, the goods shipped are automatically covered under legal liability standard to the transportation industry.
  • For international air freight shipments the legal liability set forth by the Warsaw convention is $20.00/kg.
  • For international sea freight shipments the legal liability limit is US$500 per customary shipping unit. (FCL: 1 container = 1 shipping unit.

What is Warsaw Convention

International civil aviation agreement that establishes the legal framework for carriage of passengers, luggage (baggage), and goods (cargo).

  • It covers conditions of carriage that :

    (a) Define liability of the carrier in case of loss, damage, injury or death due to accident on international flights.
    (b) Spell out procedures for claims and restitution.

  • Lays down out the requirements for format and content of air transport documents (passenger tickets, luggage tickets, air consignment notes, etc. Signed in 1929 in Warsaw (Poland) by 31 states, it has evolved into one of the most important instruments of private international law adhered to by 105 signatory nations.

Over the years, several amending protocols, supplementary instruments, rules, and regulations have been added which, together with the original conventions, are called the Warsaw System. Credited for being a major factor in the development of international air traffic, it is now overseen by the International Civil Aviation Organization (ICAO)


To ensure your shipment for the replacement of the goods shipped in case of total or partial loss or damage, request insurance for the replacement value of the goods=commercial invoice value. PWS sells insurance for $0.60/$100.00 insured value with a $12.00 minimum. Sample Insurance Calculation: Commercial Invoice Value = $10,000.00 Insurance Cost: $60.00


To ensure your shipment for the replacement of the goods shipped in case of total or partial loss or damage plus the cost of shipping the freight, request insurance for the CIF value of the shipment. CIF + 10% Terms (Commercial invoice value + insurance costs + freight= CIF value x 110% (10% for any unforeseen costs or charges).

This type of insurance covers your shipping costs too in the case of damage or loss where the repair or replacement must be done somewhere other than the consignee's location. Recoverable freight charges may be prorated based on the portion of the shipment damaged in the case of partial loss/damage. If there is damage and the repair occurs at the final destination of the goods (consignee's facility), no freight charges are refundable.


It is important to insure goods for the proper value. If a shipment is underinsured then the claim will only be paid by the insurance companies to the percentage that the shipment was insured.

Sample: Goods Value: $10,000 Insurance Value: $5,000 Damaged repair cost: $4,000 the insurance was purchased at 50% of the goods value; therefore, 50% of the claim amount will be paid. Claim Payment: $4,000 x 50% = $2,000 payment.

If a shipment is over insured you are not able to get coverage beyond the repair/replacement costs. The result is an overpayment of premium.


Proper notation on shipping documents and notification to the appropriate parties is essential to ensure the ability to process a claim. Like all insurances, payment of the premium and freight charges is required in order for coverage to be confirmed and a claim to be filed and ultimately settled.

As an example, if you don't pay your auto insurance and get into an accident then you don't have any coverage.

If damage is noted on the bill of lading at the time of delivery, then the claim must be submitted with in a stipulated time of actual delivery (pls refer your policy document). It is not necessary to refuse a shipment if proper damage is noted. Insurance companies should also be notified immediately.

If damage is not notated on the bill of lading at time of delivery (concealed damage), then insurance company must be notified within 24 hours of delivery.

The Bottom Line: Freight Insurance Basics

    In summary, make sure you:

  • Arrange comprehensive cargo insurance.
  • Verify clauses exist in your sales contract for property rights, etc.
  • Understand the responsibilities and liabilities of the incoterm in your sales contract.
  • Select packaging that helps prevent damage.
  • Get copies of the insurance policy and copies of notes.

Affreighter can help you arrange for insurance….

We felicitate insurance by some of the most recognized insurance companies in the world.

Contact Affreighter Logistics today or fill up the online form with the details of the cargo

We bundle and blend extensive services
to meet your unique demands.