Freight Insurance
Intro
Freight insurance or marine cargo insurance is a type of insurance policy that generally covers the loss or damage of goods during transportation over water, as well as by other means of transit whether or not connected to the sea voyage, such as road, rail, or air.
It provides financial protection to exporters, importers, and logistics companies, ensuring that they are compensated if the goods are lost, damaged, or destroyed during transit.
We recommend that anyone who is transporting cargo ensures they have adequate insurance in place
While it is generally not mandatory for you to have insurance in place, the amount of compensation you may be otherwise entitled to in the event of a potential claim is likely to be subject to only very limited liability in accordance with the transport/shipping company’s trading conditions.
Main Types of Policies
Single-Trip Policy: Covers a one-time shipment. Suitable for companies that ship infrequently or have irregular shipping schedules. Unity Logistics offer this type of insurance as an add-on service when arranging transportation of goods.
Open Policy (Annual Cover): Provides continuous coverage for multiple shipments over a specific period (usually one year). Ideal for businesses that regularly transport goods. Unity Logistics can recommend an insurance broker that offers this type of cover if required.
Note: Typically single-trip policies will cover more general goods and of a new and unused nature. For more bespoke coverage an open policy cover may be more appropriate.
We can quote for single-trip insurance for shipments where we are also assigned to arrange transportation
Our minimum premium is £35.00 for “All Risks” coverage
Types of Coverage
The Institute Cargo Clauses (ICC) are a set of standardised terms used in marine cargo insurance, developed by the Institute of London Underwriters.
These clauses define the scope of coverage for goods being transported by sea, air, or land, providing clarity and consistency in marine insurance contracts. The ICC is widely used globally, forming the basis of most cargo insurance policies. There are three main types of Institute Cargo Clauses, each offering a different level of coverage:
ICC (A) = Broadest coverage or “All Risks” coverage
ICC (B) = Moderate coverage or “Named Perils” coverage
ICC (C) = Basic coverage or “Minimal” coverage
ICC (A) or “All Risks” Coverage
As the highest form of coverage this is the type of coverage that you should be seeking out wherever possible, and is the type of coverage that applies in the vast majority of instances when we effect single-trip insurance policies.
This type of cover covers almost all possible risks of loss or damage to the cargo, except for specific exclusions which typically include (but may not be limited to):
> Consequential loss (loss caused by delay), even if caused by an insured risk
> Damage due to improper packaging
> Deliberate misconduct by the insured
> Inherent vice (damage from the natural characteristics of the goods, like fruit rotting)
> War, strikes, riots, and civil commotions
Note: You should always check your policy for exact terms of cover.
Key Factors Affecting Premiums
Type of Goods: Fragile, perishable, or high-value goods may incur higher premiums. The single-trip policy that we offer typically splits goods out into three main categories: general goods, fragile goods and consumer electronics.
Nature of Goods: For example, are the goods new and unused or are they second-hand. It can be much more difficult to value goods which are not new and unused.
Route and Mode of Transport: Riskier routes or transport methods can increase insurance costs. Underwriters will sometimes limit coverage for shipments to some countries up to the destination port only, and some countries are excluded absolutely.
Typical Formula
COST OF INSURANCE = VALUE OF GOODS + SHIPPING FEES + 10% x INSURANCE PREMIUM (%)
or
Minimum premium (whichever is greater)
Note: There is a deductible excess of £250 in the event of a potenial claim for general cargo, and £500 for fragile cargo. This sum is not payable but is deducted from the claimable total.
Note: Depending on the details, if the value of goods + shipping fees + 10% is around £15,000 or less then the minimum premium would generally apply.
General Comments
If you are unsure if your goods are insured or not the general presumption should be that they are not insured. For goods to be fully insured during transit this will typically require you to have requested and instructed somebody in writing to insure the goods on your behalf.
You should always check over your insurance policy wording and what you should do in the event you become aware that you may need to make a potential claim.
A good rule of thumb is to notify the relevant party as soon as you become aware and then to start collating pictures and evidence that would later be needed to substantiate the claim.
Diclaimer: The information provided on this website is for general informational purposes only and should not be considered professional advice. While we strive to ensure the accuracy and relevance of the information, Unity Logistics does not guarantee its completeness, reliability, or suitability for any specific purpose. Users should consult with qualified professionals before making decisions based on the content found on this website. Unity Logistics disclaims any liability for actions taken based on the information presented here.