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Why Do I Need Cargo Insurance?

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Cargo insurance will cover your goods if something happens to them in transit. Carriers work hard to limit their liability, which is why cargo insurance is so vital.

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Fifty percent of freight claims are denied by carriers. If something happens to your goods while in transit, it’s highly unlikely that the carrier will be held accountable for much, if any, of the value of the goods.

The journey is long and filled with danger. Your cargo will pass through many hands on its way to you: during loading and unloading from trucks and containers; through ports and exam sites; and through warehouse after warehouse. Each step is necessary for your merchandise to ultimately reach you, but having your goods move through so many checkpoints increases the chance of damage.

Carriers are innocent until proven guilty. If damage or loss does happen, carriers will do everything within their power to limit their liability or to avoid it altogether. The burden to prove that the carrier was at fault is placed on you, and you will need to definitively prove that:

  • Loss occurred while the shipment was in the carrier’s care, custody, and control
  • The carrier was negligent in handling your shipment

Carriers limit their liability. Even if you are able to prove that the transporter was at fault, you may still not get the full value of your goods. Carriers strictly limit their liability. If you turn over any Bill of Lading, for example a FedEx or UPS tag, you will find the fine print outlining exactly what a carrier agrees to cover.

Below you will find some of the typical limits of carrier liability. Would these limits meet the value of your goods?

Things Can -- and Do -- Go Wrong

Most damage to cargo occurs en route to and from ports, but there's also:

  • Ships sink
  • Theft
  • Storms
  • Water damage
  • Shifting
  • Cartons torn and/or crushed

No carrier is obligated to pay for losses beyond their control -- for example:

  • Acts of God
  • Latent defects in the ship’s hull or machinery
  • Un-seaworthiness of vessel
  • Criminal acts or negligence by captain or crew
  • Perils, danger, and accidents at sea
  • Fire
  • Theft

Other questions about insurance:

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Customs brokerage services are provided by Flexport’s wholly-owned subsidiary, Flexport Customs LLC, a licensed customs brokerage with a national permit. International ocean freight forwarding services are provided by Flexport International LLC, a licensed Ocean Transportation Intermediary FMC# 025219NF. U.S. trucking services are provided by Flexport International, LLC, a FMCSA licensed property broker USDOT #2594279 and MC #906604-B. All transactions are subject to Flexport’s standard terms and conditions, available at www.flexport.com/terms 沪ICP备16041494号

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