Marine cargo insurance

A steady guide to cover for goods in transit

Marine cargo insurance protects goods while they move by sea, air, road or rail. If you import, export, or ship domestically, it helps safeguard your balance sheet when things go wrong in transit. Policies can cover physical loss or damage from risks such as rough handling, collisions, fires, theft, and weather events. For UK businesses, cover is shaped by the London market’s deep expertise and capacity, including the specialist Lloyd’s market.

Globally, cargo premiums totalled around USD 22.64 billion in 2024, a modest 1.6% rise on the prior year. Loss ratios have improved for six straight years, signalling better claims outcomes and steadier pricing. In the UK, freight activity is rising, with major ports handling 5% more tonnage in early 2025 and containers up 13% - London led container growth at 16%. More cargo in motion typically means greater exposure, and therefore a stronger need for suitable cover.

Insurance can offer real financial protection, but only when you understand what is covered - and what is not.

The market remains competitive. UK insurance rates fell on average in 2025, influenced by global conditions. That can help with affordability, but it makes careful policy selection and accurate disclosure even more important. Emerging risks need attention too. Recent large vessel fires, lithium-ion battery exposures, war-related losses and mis-declared cargo incidents remind us that claims can escalate quickly. This guide explains what marine cargo insurance covers, how it works, and how to buy with confidence.

What is protected and how claims typically unfold

Most policies cover physical loss or damage to cargo during transit and temporary storage that is incidental to the journey. All-risks options usually respond to most external causes, while named perils policies limit cover to specific events. Common extensions include cover for general average contributions, debris removal, and re-routing. Exclusions often include inherent vice, insufficient packing, delay, ordinary leakage, and losses from mis-declared hazardous goods. Sanctions and war exclusions may apply unless specifically bought back.

Here is how it works in practice. A UK importer buys electronics shipped in containers from Asia. The freight forwarder arranges shipment, and the importer arranges their own marine cargo policy on an annual open basis. If a container is damaged by a vessel fire, the policy may cover repair or replacement up to the insured value, subject to excess and terms. If a general average is declared after a grounding, the policy can pay the importer’s assessed contribution so goods are released. By contrast, if the cargo is damaged by battery thermal runaway linked to mis-declared contents, cover could be declined because of the mis-declaration.

Claims are usually notified to the insurer or appointed surveyor quickly after discovery. You will be asked for commercial invoices, packing lists, transport documents, photos, and survey reports. Settlement depends on policy wording, evidence provided, and the insured value basis. Improved market loss ratios indicate more stable claims outcomes, but prompt notification, accurate documentation, and honest disclosure remain essential for a smooth process.

Who benefits most from this cover

Marine cargo insurance suits UK importers, exporters, manufacturers, e-commerce brands, wholesalers, and retailers whose cash flow depends on goods arriving as planned. It is also valuable for businesses shipping high-value components, temperature-sensitive items, or goods with complex multi-leg routes. If you regularly rely on third parties to handle your goods, this cover can help you manage risks you cannot fully control.

It may be less necessary for very low-value items, shipments where the carrier’s contractual liability is sufficient for your needs, or where you can comfortably self-insure occasional losses. However, carrier liability limits are often far below the commercial value of goods. As vessel sizes and insurable values rise, a single loss can be financially material. The London market, including Lloyd’s with its notable share of European cargo business, provides tailored solutions that can scale with your operations.

Choosing a level of protection that fits

1. Basic - Named Perils
   • Covers specified risks such as fire, collision, stranding, overturning, and theft by forcible entry.
   • Lower premiums but narrower protection. Suitable for lower-risk routes or commodities with robust packaging.
2. Standard - Institute Cargo Clauses C or B
   • Clause C offers core perils. Clause B adds broader perils like washing overboard and entry of sea, lake or river water.
   • A balanced option for many routine shipments where cost control matters.
3. Comprehensive - Institute Cargo Clauses A (All Risks)
   • Widest cover for physical loss or damage from external causes, subject to exclusions.
   • Recommended for higher-value cargo or complex supply chains where delay exposure and handling risks are higher.
4. Optional add-ons
   • War and strikes risks - for routes affected by geopolitical tensions or port disruptions.
   • Increased limits for storage - if goods sit at ports or warehouses between legs.
   • Temperature deviation - for perishable or temperature-controlled cargo.
   • Contingency cover - protects sellers if buyers fail to arrange agreed insurance.
   • Stock throughput - combines transit and static stock under one policy for end-to-end protection.
   • DIC/DIL (difference in conditions/limits) - fills gaps in counterpart policies you do not control.

Pick the narrowest cover that still safely matches your risks - not the cheapest at any cost.

What it costs and why prices vary

Prices are indicative only and vary by insurer, market cycle, and your risk profile.

Who can apply and what insurers need to see

Most UK-registered businesses involved in shipping goods can apply, including importers, exporters, manufacturers, wholesalers, and online retailers. Insurers usually ask for details of your annual sendings, shipment frequency, origin and destination countries, values per consignment, Incoterms, commodity descriptions, packing methods, and any prior claims. They may also request vendor due diligence, routing plans, and evidence of security measures such as seals, GPS tracking, and temperature logs where relevant.

Applications can be declined if information is incomplete, if the commodity is prohibited, if there is a history of frequent or severe losses without clear remediation, or if you ship routinely through sanctioned territories. Mis-declaration or under-declaration of hazardous items, particularly lithium-ion batteries, can invalidate cover. Clear, accurate disclosure at quotation and renewal is essential to keep cover effective throughout the policy term.

From quote to claim - the simple path

1. Gather shipment data, annual sendings, commodities, packing, and routes for disclosure.
2. Request quotes from UK brokers or insurers specialising in marine cargo risks.
3. Compare cover levels, exclusions, deductibles, and sub-limits against your risk profile.
4. Select all-risks or named perils, then add war, strikes, or temperature cover if needed.
5. Bind the policy, confirm insured value basis, and receive certificates or open policy wording.
6. Before shipping, verify Incoterms and responsibilities for insurance with trading partners.
7. If loss occurs, notify promptly, secure evidence, and arrange a survey if required.
8. Submit documents for assessment and track settlement against policy terms and excess.

Advantages, drawbacks, and what to weigh up

Market context to consider: Europe’s cargo market share is edging down while Asia-Pacific rises on strong trade flows, especially China. Larger vessels and newbuilding prices are increasing insurable values, lifting potential claim severity. UK rate softening helps affordability, but underwriting discipline tightens after severe events like vessel fires.

Key checks before you commit

Review the exact Institute Cargo Clauses and any endorsements. Confirm insured value basis, including whether you are using cost, insurance and freight plus a margin. Understand all deductibles and any sub-limits for theft-attractive goods, temperature-controlled items, or storage. Check waiting periods or time limitations for discovery and notification, as late notice can affect claims. Ask how general average is handled, and whether salvage and debris removal costs are included. At renewal, compare total cost of risk, not just headline premium, including excesses and risk management requirements.

Alternatives and related covers

1. Carrier liability insurance - relies on carrier limits, suitable only where values are modest and risk appetite is higher.
2. Freight forwarder’s liability - protects the forwarder, not cargo owners, but relevant for logistics providers.
3. Trade credit insurance - covers buyer non-payment risk, complementary to physical loss cover.
4. Stock throughput - combines transit and storage, useful for continuous supply chains and high inventory levels.
5. Political risk insurance - for confiscation, expropriation, and currency inconvertibility on sensitive routes.

Common questions answered

Q: Is all-risks cover really all risks? A: It covers physical loss or damage from external causes, subject to listed exclusions. Typical exclusions include delay, wear and tear, inherent vice, and inadequate packing. Read the wording carefully and consider add-ons if your route needs them.

Q: Do Incoterms decide who buys the insurance? A: Incoterms set delivery points and responsibilities, which often indicate who should insure. However, they do not automatically provide insurance. Confirm responsibilities in the contract and ensure your policy aligns with the agreed terms.

Q: Are lithium-ion batteries covered? A: Batteries can be covered, but strict packing, declaration, and carriage rules apply. Mis-declaration or non-compliance with dangerous goods regulations can void cover. Expect tighter underwriting and higher rates for battery-heavy shipments.

Q: How are premiums trending in the UK? A: UK rates softened in 2025 alongside global conditions, supporting competitive pricing. That said, major losses or geopolitical shifts can lead to firmer terms, higher deductibles, or exclusions on impacted routes.

Q: What is general average and why does it matter? A: General average is a maritime principle where all cargo interests share certain emergency costs after a major incident. Without insurance, you may need to post a cash bond. Cargo policies can cover your assessed contribution.

Q: Is a stock throughput policy better than standalone cargo? A: It can be if you hold significant inventory and goods move continuously between sites. It streamlines cover across transit and storage, but needs accurate values and controls to avoid underinsurance.

Q: Do I need insurance if the carrier is liable? A: Carrier liability is limited by convention and often far below cargo value. Cargo insurance aims to make you whole, subject to policy terms, rather than relying on limited carrier compensation.

What to do now

If you ship goods regularly, gather your shipment data and compare cover levels against the risks on your routes. A UK broker with London market access can explain options clearly and obtain quotes. Take your time, check the wording in full, and choose the level of protection that fits your exposure and budget.

Important notice

This guide provides general information, not personal financial advice. Policy terms, exclusions, and prices vary by insurer. Always check the full wording, disclose information accurately, and seek professional guidance if you are unsure about suitability for your business.