Types of Marine Insurance for Shipments (What Actually Covers Your Cargo?)

After reading about the terrifying financial rules of General Average (where you might have to pay for someone else’s lost cargo), the most logical question is: 

How do I protect myself?

The answer is Marine Insurance.

This is not a single product but a collection of policies designed to protect the ship, the crew, and the cargo. For shippers, you only need to focus on one main category: Cargo Insurance.

Here is a simple guide to the types of marine insurance that secure your shipment.

What Are the Types of Marine Insurance? (A Simple Guide to Cargo Protection) 🛡️ 

Category 1: Protecting the Goods (Cargo Insurance)

This policy is purchased by the owner of the goods (the shipper). This is the only way to get reimbursed for the full value of your products if they are damaged or lost.

The coverage level for Cargo Insurance is standardized worldwide through what are called the Institute Cargo Clauses (ICC). 

Think of these as your basic, mid-tier, and premium insurance plans.

ICC (A): The "All Risks" Plan

This is the most comprehensive coverage you can buy.

• What it Covers: All physical loss or damage from any external cause, unless specifically excluded. This includes theft, non-delivery, rough handling damage, and water damage.

• What it Excludes: Just a handful of items: war, strikes, nuclear damage, and loss due to the shipper's own poor packing.

• Best For: High-value goods, electronics, finished products, and pharmaceuticals.

ICC (B): The "Named Perils" Plan

This is the middle tier. It covers fewer risks than ICC (A) and is cheaper.

• What it Covers: Damage caused by specific events, such as fire, explosion, sinking, capsizing, rough handling, and the container being washed overboard.

• What it Excludes: Theft, non-delivery, and damage due to normal leakage or rust.

• Best For: Bulk commodities, lower-value goods, and general merchandise.

ICC (C): The "Catastrophe Only" Plan

This is the cheapest and most basic coverage.

• What it Covers: Only major catastrophic events, such as total loss of the vessel, fire, or explosion.

• What it Excludes: Everything else, including theft, rough handling, water damage, and anything that isn't a ship-destroying event.

• Best For: Raw materials or high-volume, low-value items where you only need protection against total disaster.

Crucial Fact: Cargo Insurance is the policy that pays your General Average contribution if the ship is saved. It protects your cash, and your goods.

Category 2: Protecting the Vessel (Shipowner’s Insurance)

These policies are paid for by the shipping line (like CMA CGM or Hapag-Lloyd). They do not cover your cargo, but they are essential for the global trade system to function.

Marine insurance is one of the oldest forms of insurance, dating back to the Lloyd’s of London coffee houses in the 17th century. It is the financial safety net that allows billion-dollar vessels and cargo to sail.

Summary

Don't rely on the shipping line's basic liability. If you are the shipper, your focus must be on Cargo Insurance. The level you choose ICC (A, B, or C) determines how much financial risk you are truly taking.

Ensure your paperwork is spotless, and use TraceContainer.com to track your cargo. Accurate tracking data is often required by insurers to verify when and where an incident occurred.