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Cargo insurance is for importers, exporters and freight forwarders who need to know whose risk the goods are on each leg of the trip. The Incoterms on your sales contract answer that, and a letter of credit may also call for an insurance certificate. Fortis Risk Solutions matches the cover to the point where risk passes to you, then compares wordings for a single shipment or an annual open policy. We check the conditions that trip people up, such as packing unfit for the voyage. If cargo arrives damaged, we arrange the survey and help manage the claim. Tell us what you ship and on which routes. Call 03 7046 3766 or send an enquiry.
What Marine Insurance Covers
Cargo insurance, also called marine cargo or transit insurance, covers goods and maritime interests against loss or damage in transit by sea, air, road or rail.
It protects cargo owners, importers, exporters, freight forwarders and logistics operators against marine perils such as loss, damage, theft or delay in domestic and international trade. Private boat owners are a different case and need boat insurance instead.
Whether you ship within Australia or overseas, marine insurance keeps trade moving and protects cash flow after a transit loss. It sits beside your business insurance. It sits within our business insurance range at Fortis Risk Solutions.
Marine Insurance: Cover Sections and Benefits
What Marine Insurance does not cover
Marine insurance answers accidental loss or damage to goods in transit. It does not stand behind the condition of the goods when they were packed, or behind a supplier who fails to deliver. The usual exclusions are:
- Inadequate or unsuitable packing and preparation for the journey, including containers packed by you or on your behalf
- Inherent vice: fruit that ripens, chemicals that separate, timber that moves with humidity
- Ordinary leakage, ordinary loss in weight or volume, and ordinary wear and tear
- Delay, loss of market and consequential financial loss, even where the delay follows an insured event
- Wilful misconduct by the insured, and unlawful trade
- Insolvency or financial default of the carrier, where the goods were shipped knowing the risk
- War, strikes, riots and terrorism, unless those clauses are bought back on the policy
FRS checks the cover against your real trade lanes, terms of sale and packing method, so the point where risk passes to you is the point where the policy starts.
How Marine Insurance premiums are set
Cargo underwriters price the journey and the commodity rather than the size of your business. The main rating factors are:
- Annual value of sendings, split between imports, exports and domestic movements
- What is being carried, and how fragile, perishable or attractive to thieves it is
- Mode of carriage: sea, air, road or rail, and whether the goods are containerised
- Trade lanes and ports used, including any transhipment or inland leg
- Terms of sale, which decide how much of the journey is your risk
- Packing standard, and whether goods sit in storage between legs of the trip
- Claims history, the maximum value in any one sending, and the excess chosen
Annual open policies suit regular importers because every sending is declared under one contract. Single transit cover suits a one off shipment. FRS quotes marine insurance both ways and shows what each does to the excess and the limits.
How to claim on Marine Insurance
Cargo claims turn on paperwork created in the first hours after delivery. Once a clean receipt is signed, the rights against the carrier are weakened and the insurer has less to recover. The FRS process:
- Record on the docket: Note the damage or shortage on the delivery docket before signing, and take photographs of the packaging and the seal
- Notify: Tell FRS the same day so a survey can be arranged before the goods are moved or repacked
- Notify the carrier: Give written notice of a claim to the carrier, port or airline within the time limit shown in their conditions
- Keep the goods: Keep the damaged goods and all packing material until the surveyor has seen them, and do not dispose of anything
- Do not admit liability: Do not admit liability to your customer or agree a settlement with them before the insurer has responded
- We lodge and manage: FRS lodges the claim with the commercial invoice, packing list, bill of lading and survey report, then follows the recovery
Full details are on our make a claim page.
Marine Insurance compared with Goods in Transit under a business pack
| Question | Marine Insurance | Goods in Transit under a business pack |
|---|---|---|
| What it covers | Goods moving by sea, air, road or rail, including international legs and storage in between | Goods moving locally, usually by road, often only in your own vehicles |
| Who buys it | Importers, exporters, wholesalers and anyone shipping high value stock | Small businesses delivering their own product around town |
| Typical trigger | Container loss, water damage at sea, theft in a depot, mishandling at a port | An accident involving the delivery van, or theft from it |
| Sits with | Stock, business interruption, commercial motor | The rest of the pack: property, liability, glass |
The transit section of a pack is convenient but narrow. Once goods cross a border or sit in a third party warehouse, that section usually stops and a marine insurance policy is the right home for the risk. FRS reviews both against your business insurance renewal so nothing falls between them.
Marine Insurance - Client Case Studies
Cases from the Fortis Risk Solutions broking team. Client names have been removed.
Client case: Imported Goods Damaged During Sea Transit
The client situation: A furniture retailer imports a container of tables and chairs from overseas. During the voyage, heavy weather causes movement inside the container, damaging a significant portion of the furniture before arrival in Australia.
How the policy responded: The Marine Cargo policy helped cover the cost of the insured goods that were accidentally damaged while in transit, subject to the policy terms and excess.
How Fortis Risk Solutions helps: We arrange marine cargo cover on the full landed value of the goods and lodge the claim with the survey report and shipping documents the insurer asks for.
Client case: Cargo Stolen During Inland Transit
The client situation: An importer receives a shipment of electronics and gadgets at an Australian port. While the goods are being transported by truck from the port to the importer’s warehouse, the truck is broken into and part of the shipment is stolen.
How the policy responded: Where theft and door-to-door transit were covered, the Marine Cargo policy responded to the loss of the insured stock while it was in transit.
How Fortis Risk Solutions helps: Many cargo policies stop at the port. We ask for door-to-door transit and theft cover, so the last leg to the warehouse is insured as well.
Client case: Truck Accident Damages Goods in Transit
The client situation: A wholesale business is transporting a large order of stock from its warehouse in Sydney to a customer interstate. The delivery truck is involved in an accident, causing several pallets of goods to be crushed and damaged.
How the policy responded: The Marine Transit policy helped cover accidental physical damage to the insured goods while being transported by road.
How Fortis Risk Solutions helps: Goods on a truck are not covered by the truck’s motor policy. We arrange marine transit cover for domestic deliveries so the stock itself is insured.
Every policy is different and the outcome of a claim depends on its terms. As your broker, Fortis Risk Solutions compares insurers and policy wording before you buy, and lodges and manages the claim for you when something happens. Talk to us about your own cover.
Marine Insurance FAQs
Yes. Marine cargo insurance can be arranged door to door, covering sea, air, road and rail transit from origin to final destination. Damage to your own delivery vehicle is a matter for commercial motor insurance.
It is not legally compulsory. Without it, though, cargo owners carry the full financial risk of loss or damage in transit. Carrier liability is typically limited and may not cover the full value of the goods.
Yes. Responsibility depends on the Incoterms in the contract:
- Under FOB, the buyer is responsible for insurance once the goods pass the ship's rail.
- Under CIF, the seller usually arranges insurance, but the cover may be limited.
Check which term applies before each shipment.
Single transit policies suit occasional shipments. Annual open policies suit regular importers and exporters, and they add efficiency, cost savings and automatic cover.
Before comparing policies, check your sale terms. Incoterms such as FOB or CIF decide when the risk passes to you, and so whether you need to insure the voyage at all. For the cover itself, look at the clause set: Institute Cargo Clauses (A) are the widest standard terms, while (B) and (C) name fewer risks. Then choose between single shipment cover and an annual policy for regular imports. Our brokers compare cargo wordings for importers and exporters.
Related pages
Related industry pages: Trade and Logistics Insurance, Renewable Energy Insurance
Talk to a broker about Marine Insurance
Call 03 7046 3766 on weekdays between 9:30am and 6pm, email admin@fortisrisksolutions.com.au, or send an enquiry and a broker from our Box Hill or Hawthorn office will come back to you about marine insurance. Tell us what the business does and what the lease or contract asks for, and we take it from there.