The short answer
Cargo insurance pays for loss of or damage to goods while they are being shipped, whether by truck, rail, sea or air. A carrier's own liability is usually limited and conditional, so it often leaves a gap. A licensed broker arranges cover for a single shipment or for all your shipments over a year, based on what you ship, how, where and on what sales terms.
- Importers and exporters moving goods across borders
- Manufacturers and wholesalers shipping to customers by truck or freight forwarder
- Online sellers whose products travel through couriers and fulfilment centres
- Freight forwarders and carriers who hold goods owned by others
- Businesses that move high-value, fragile or temperature-sensitive goods
2 licensed brokers in the network handle this. In Alberta, Canada, a request for cargo insurance can be offered to up to three of them, chosen because they are licensed for this line and place. They are test brokers while we are in demo.
See the brokers → Outside Alberta, Canada you can prepare and save a request today; sending opens place by place. Brokers answer with their own quotes. Broker.insure does not quote, advise or take commission.
01 / What it covers
The parts worth understanding
Carrier liability versus cargo cover
A carrier's responsibility is often capped by contract or law, by weight or by shipment, and has defences. Cargo insurance is separate and protects the owner of the goods.
Basis of cover
Broad terms pay for most physical loss or damage not excluded; narrower terms name specific causes such as fire, collision or sinking. Which basis you choose changes what a claim looks like.
Single shipment or annual open policy
A one-time certificate suits an occasional shipment. An open policy covers all shipments declared during the year and is usually more practical for regular shippers.
Valuation
Goods are usually valued at invoice value plus freight, and sometimes an agreed margin for expected profit. Whether that margin is included is a decision to make in advance.
Warehouse and storage in transit
Time in a port, terminal or distribution centre between legs of the journey. Many policies cover this up to a set time, after which special terms are needed.
Transit conditions and exclusions
Poor packing, delay, inherent defect, spoilage without a covered cause and unattended vehicles are common sticking points. Temperature-controlled goods need specific wording.
02 / Get ready
Bring this, and expect these questions
Gather
- A description of the goods, including their typical value per shipment and per vehicle
- Routes, origins, destinations and the modes of transport you use
- Your annual shipment volume and your largest single shipment
- Sales terms, such as which party bears risk at which point, from your contracts
- Names or types of carriers, forwarders and warehouses you rely on
- How goods are packed, including pallets, containers, refrigeration or special handling
- Any lender or customer requirement for a certificate and its wording
- Losses and damage claims on previous shipments, with causes
- Any seasonal peaks or high-value periods of year
A broker will ask
- What do you ship, where does it start and finish, and how does it travel?
- At what point does ownership and risk pass to your customer?
- What is the highest value on one truck, vessel or aircraft at a time?
- Do goods sit in warehouses or terminals along the way, and for how long?
- Is the cargo fragile, perishable, attractive to thieves or temperature-sensitive?
- Who arranges the freight, and what liability does the carrier accept?
- Do you need a certificate in a particular form for a letter of credit or a buyer?
- Have goods been lost, stolen or damaged before, and what was the cause?
Not sure of an answer? Leave it. "Not known yet" is a fine answer, and a broker will help you fill it in.
03 / Build your request
Answer a few questions. Get your own list.
Pick what fits. Your answers shape the list beside them, and they are saved to your request as plain facts a broker can read. "Not sure yet" is always a fine answer.
04 / Three situations
See which one sounds like yours
A furniture maker shipping to US customers
A small workshop sells pieces to buyers across the border and uses a freight forwarder. A recent dining table arrived cracked, and the forwarder's liability turned out to be far below the table's price.
First steps. Keep the shipping documents and photographs of the damage. Tell the broker how pieces are crated and how the forwarder's liability is limited, and ask about cover that follows the goods door to door, including who files a claim when the buyer owns the goods in transit.
A food distributor with refrigerated trucks
A regional distributor moves chilled goods to restaurants and grocers. A refrigeration unit failed on the highway one night and the load was a loss, but the policy it relied on excluded spoilage unless a specific cause occurred.
First steps. Review the temperature-related wording with the broker before the next load. Ask how breakdown of refrigeration, delays and unattended vehicles are treated, and what records, such as temperature logs, would be needed to support a claim.
An importer buying machine parts overseas
The buyer purchases on terms where the risk passes to them when the goods are loaded at the foreign port. The shipment goes by sea, then truck, with several days in a container yard.
First steps. Bring the purchase terms to the broker and ask exactly when the buyer is responsible and from which point cover must begin. Confirm that storage in the yard and the last leg by road are included, and that the certificate matches what the bank or buyer expects.
05 / Words you will hear
The jargon, in plain words
- Bill of lading
- The document a carrier issues acknowledging receipt of goods. It sets out the terms of carriage, including limits on what the carrier owes if cargo is lost.
- Declared value
- The worth of the shipment stated to the carrier or insurer. If it is too low, any payment after a loss may follow the lower figure.
- Open policy
- A standing arrangement under which each shipment is reported as it moves, so regular shippers are not arranging cover load by load.
- Inherent vice
- A weakness inside the goods themselves, such as produce that ripens or metal that corrodes, that causes damage without any outside event. It is commonly excluded.
- General average
- A sea-law principle where everyone with cargo aboard shares the cost of a sacrifice made to save the voyage, such as throwing goods overboard.
06 / Common mistakes
What trips people up
- Relying on the carrier's liability limit and assuming it is equal to the value of the goods.
- Not checking who bears the risk under the sales terms, and so insuring the wrong party's interest.
- Skipping cover for storage between legs of the journey.
- Underdeclaring shipment values on an open policy, which can cause problems when a loss happens.
- Shipping goods with weak packing, then discovering that poor packing is an exclusion.
- Not photographing, noting and reporting damage at delivery before signing for the goods.
Ready when you are
Turn this into one clear request.
Save it, add what you know, and choose when to send it. A licensed broker who handles cargo insurance takes it from there.
07 / Questions people ask
Straight answers
Is cargo insurance the same as carrier liability?
No. Carrier liability is the carrier's legal or contractual responsibility, which is often limited and subject to defences. Cargo insurance is a separate policy that protects the owner of the goods, usually for their value, and is not affected by who was at fault. Many shippers carry both layers but rely on the cargo policy for a claim.
Do I need cargo insurance for domestic shipments?
It is not usually a legal requirement, but a courier or trucker's limit can be low relative to the goods. Whether you need it depends on value, fragility and what your customer contract says. Ask your broker to compare the carrier's liability limit to the value of a typical shipment.
What is an open cargo policy?
It is an ongoing policy that covers each shipment you declare during the policy period, rather than arranging cover one shipment at a time. It suits businesses that ship regularly, as the terms are agreed once. You report shipments or values periodically, so accurate records matter.
What does cargo insurance not cover?
Common exclusions include poor packing, inherent defect, normal wear, delay on its own, and unattended-vehicle theft without proper security. Some can be addressed by endorsement and others cannot. Ask your broker to explain the exclusions in plain terms for your type of goods and the routes you use.
How do I make a cargo insurance claim?
Note damage on the delivery documents, photograph everything, keep packaging, and notify the carrier and your insurer promptly, because strict time limits can apply. Keep the invoice, bill of lading and any survey. Your broker can explain who should lodge the claim and what evidence the insurer will want.
General information, not insurance advice. Broker.insure is a directory and request service: it is not an insurer and does not quote, bind or advise. Policy terms, availability and what is required where you live depend on your situation and on licensed professionals. Updated 2026-10-31.