1. Why is Marine Cargo Insurance Necessary?
During maritime transport, goods face various risks: natural disasters (typhoons, tsunamis, severe weather), accidents (ship grounding, collisions, fires), loading and unloading damage (sling detachment, forklift collisions), theft and pilferage, seawater ingress, temperature changes (reefer container failure), etc.
Globally, approximately 1,400 containers are lost at sea each year, with cargo damage claims totaling billions of US dollars.
2. Three Types of Coverage
| Coverage Type | Scope of Coverage | Premium Rate | Recommendation |
|---|---|---|---|
| Free of Particular Average (FPA) | Covers total loss only | Lowest (approx. 0.05%) | ❌ Insufficient coverage, not recommended |
| With Particular Average (WPA) | FPA + partial loss | Medium (approx. 0.1%) | 🟡 Acceptable for general cargo |
| All Risks | WPA + general external risks | Highest (approx. 0.15%-0.3%) | ✅ Most recommended |
Additional Coverage
Based on basic insurance, you can add: Theft, Pilferage, and Non-Delivery (TPND), Fresh Water Rain Damage, Clashing and Breakage, Sweat and Heating, Breakage of Packing, Rusting, etc.
3. Insurance Application Process
| Step | Action | Required Information |
|---|---|---|
| ① Choose Coverage | Select according to cargo value | Cargo name, packaging |
| ② Submit Application | Apply to insurance company / freight forwarder | Invoice, Bill of Lading number, vessel name and voyage |
| ③ Pay Premium | Insure at 110% of CIF value | — |
| ④ Receive Policy | Insurance company issues the policy | Policy number |
Premium Calculation Example
Cargo value: $50,000 (CIF)
Insured increased value: 110%
Insurance amount: $55,000
Insurance rate: 0.25% (All Risks)
Premium: $55,000 × 0.25% = $137.5
4. Cargo Damage Claims Process
| Step | Action | Time Limit |
|---|---|---|
| ① Preserve On-Site Evidence | Take photos/videos, keep cargo in original condition | Immediately |
| ② Notify Relevant Parties | Notify carrier and insurance company | Within 3 days after taking delivery |
| ③ Apply for Cargo Damage Survey | Third-party agency (e.g., SGS) issues a report | 7-14 days |
| ④ Collect Claim Documents | Policy/Bill of Lading/Invoice/Packing List/Survey Report | Within 14 days |
| ⑤ Submit Claim | Submit all materials to the insurance company | Within 30 days |
Essential Claim Documents
Original insurance policy, Original Bill of Lading, Commercial Invoice, Packing List, Cargo Damage Survey Report, Arrival Notice / Delivery Order, Claim Letter.
5. Common Reasons for Claim Denial
| Reason for Denial | Preventive Measures |
|---|---|
| Underinsurance | Insure at 110% of CIF value |
| Failure to Notify Timely | Notify insurance company within 3 days of discovering damage |
| Insufficient Evidence | Maintain a complete chain of evidence |
| Improper Packaging | Ensure packaging meets maritime standards |
Have cargo to ship? Send the item name/weight/volume/destination port to Bofeng Logistics, and we will provide an ALL-IN all-inclusive quote, with one price and no hidden fees. 20 years of international shipping experience.
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Get a Quote: 13075678958 | info@zhbfwl.com
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