What Is Cargo Insurance and What Are Its Types and Covers?
Cargo insurance — in Turkish emtia nakliyat sigortası — covers losses that goods of commercial value may suffer from accidents, theft, loss, fire and natural disasters while being transported from one place to another by road, sea, air or rail.
It protects the owner of the goods — importer, exporter, sender or receiver — from the start of the shipment to its destination. Depending on the policy, it covers not only an accident of the vehicle, but also breakage, wetting and shortage during loading, unloading and interim storage. This guide explains the types of cargo insurance, policy options, cover and what determines the price.
- It protects the goods themselves during road, sea, air and rail transport.
- There are three cover levels — total loss, limited and all risks; all risks is the widest.
- A single-voyage policy suits one-off shipments; open cover suits frequent shippers.
- Rainwater, humidity, rust, packing faults and contraband are excluded.
Contents
1. What Is Cargo Insurance and Who Needs It?
Damage to your goods in transit often exceeds the carrier’s liability limits, or is not covered at all. Cargo insurance closes this gap by directly protecting the value of the goods.
Who needs cargo insurance?
- Companies that import and export
- Manufacturers, wholesalers and e-commerce businesses that ship goods regularly within Turkey
- Businesses shipping valuable or fragile products
- Companies whose bank requires insurance in letter-of-credit transactions
What does cargo insurance generally cover?
- Maritime accidents such as sinking, storms and stranding
- Fire on the ship or vehicle
- Accidents during transhipment, loading and unloading
- Theft and loss of the goods (depending on the cover level)
- Situations such as stranding and detention (depending on the policy terms)
2. Cargo Insurance Cover Levels
Cargo insurance comes in three levels of cover. The right level depends on the value and fragility of your goods.
| Cover | What does it pay for? | Suitable for |
|---|---|---|
| Total loss only | Only complete destruction or loss of the goods | Low-value, robust goods |
| Limited cover | Damage to the goods caused by an accident of the vehicle (collision, overturning, fire, etc.) | Medium-risk shipments |
| All risks | All damage during transport except the exclusions in the policy | Valuable and fragile goods |
What is total loss cover?
The narrowest cover: it pays only if the goods are completely destroyed or lost. Partial damage is excluded. It may suit low-value goods that are resistant to damage.
What is limited cover?
It pays for damage to the goods caused by an accident of the vehicle, such as collision, overturning, fire or sinking. Breakage or wetting without an accident to the vehicle is not covered.
What is all-risks cover?
It pays for all damage to the goods during transport, except the exclusions written in the policy. For sea and rail transport it follows the Institute Cargo Clauses (A), and for air transport the Institute Cargo Clauses (Air). It is recommended for valuable and fragile goods.
Which extras can be added?
Strikes, terrorism and war covers can be added for an extra premium. We recommend considering them especially for international and sea shipments.
3. Policy Types and Other Transport Insurance
Cargo insurance can be arranged with different policy types depending on how often you ship.
| Policy | How does it work? |
|---|---|
| Single-voyage policy | Issued for one shipment, with details given before loading |
| Floating policy | A preliminary policy the bank requires before loading in letter-of-credit transactions |
| Open cover | Covers all shipments within a set limit and period; a separate certificate is issued for each loading |
| Annual block policy | The annual shipping value is declared at once and all shipments are covered by one policy |
Which policy type suits you?
If you ship a few times a year, a single-voyage policy for each shipment is enough. If you ship regularly and often, open cover or an annual block policy gives continuous protection without arranging each shipment separately, and is usually more economical.
What is valuables-in-transit insurance?
It is used for transfers of cash, jewellery and valuable documents. It covers damage and loss of the valuables from the moment they are collected until they are delivered; risks such as robbery can also be included.
What is freight insurance?
A type of transport insurance that protects against losses related to the transport charge, i.e. the freight. Its scope, and in whose name it is taken out, depend on the transport contract; we will assess together whether your shipment needs it.
What is boat and yacht insurance?
It protects private boats and yachts against accidents, natural disasters and problems during transfer. Alterations made without the insurer’s approval can take the boat out of cover, so the policy terms should be read carefully. With its marinas and boat tourism, Alanya often needs this insurance.
Which liability insurances fall under transport insurance?
- Domestic carrier liability insurance
- International road carrier (CMR) liability insurance
- Freight forwarder liability (FFL) insurance
- Warehouse keeper’s legal liability insurance
- Port, marina and shipyard operator liability insurance
These policies do not protect the goods themselves, but the liability of the company carrying or storing them towards the owner.
4. Exclusions and Price
The general conditions of cargo insurance exclude some situations.
What does cargo insurance not cover?
- Rainwater, humidity in the hold and rust (unless separately covered)
- Goods falling apart or being damaged due to faulty packing
- Carrying contraband or prohibited goods
- Strike, terrorism and war risks (unless added as extras)
Packing your goods soundly and suitably for transport is also important for being able to claim after a loss.
What determines the price of cargo insurance?
- The total market value of the goods
- The nature of the goods: whether fragile, valuable or perishable
- The mode of transport (road, sea, air, rail) and the type of vehicle
- Route and distance
- The cover level and extras chosen
- The insurer’s pricing policy
5. Frequently Asked Questions About Cargo Insurance
What is cargo insurance?
Insurance that covers losses goods of commercial value may suffer from accidents, theft, loss, fire and natural disasters while being transported by road, sea, air or rail.
Is cargo insurance compulsory?
In general it is optional. However, in letter-of-credit foreign trade transactions, banks or buyers may require it.
What is the difference between total loss, limited and all-risks cover?
Total loss covers only complete destruction of the goods, limited cover covers damage from an accident to the vehicle, and all risks covers all damage in transport except the exclusions.
I ship often. Do I need a policy every time?
No. With open cover or an annual block policy, all your shipments within a set period and limit are covered under one contract.
Is damage during loading and unloading covered?
Depending on the policy, yes; breakage, wetting and shortage during loading, unloading and interim storage can be included.
Isn’t the carrier’s insurance enough?
Carrier liability insurance depends on the carrier’s fault and liability limits. Cargo insurance protects the value of your goods regardless of fault.
Is damage due to packing faults covered?
No. Losses caused by faulty or inadequate packing are excluded.
What determines the price?
The value and nature of the goods, mode of transport, route, cover level and extras.
Cover levels, clauses and price vary by the nature of the goods, the mode of transport and the insurer. This page is for general information; contact us for a quote for your shipment.
Cargo insurance for the goods you ship
We compare quotes from seven insurers and choose the best one for you together.
We choose the right cover and policy type for your shipments together, and compare quotes for you.