With e-commerce volumes skyrocketing and B2B trade intensifying, the supply chain is under pressure. Load disruptions, automated sorting systems, unpredictable weather, and warehouse theft: the journey of a package is an obstacle course.
However, a common misconception persists: "If the Carrier my package, they will reimburse me."
The reality is often harsh. Without proper freight insurance, legal compensation often covers only a fraction of the actual value of your products.
This expert guide explains the mechanisms of cargo, freight, and parcel insurance to help you secure your margins and cash flow.
What is cargo insurance?
Freight insurance (often referred to as "Cargo Insurance" internationally) is a financial guarantee contract. Its purpose is to compensate the owner of the goods (the shipper or consignee, depending on the Incoterm) for material risks incurred by the goods during transport, whether by road, sea, air, or rail.
Unlike a simple tracking option, it is a risk management tool that transfers the financial impact of a loss (loss, theft, damage) to an insurer.
Carrier liability Carrier cargo insurance
This is the fundamental distinction to understand.
The Carrier an obligation to achieve a result (deliver the package), but its financial liability is limited by law.
- Contractual Liability (Limited): In the event of loss or damage, the Carrier will compensate Carrier according to a flat rate based on weight (e.g., CMR Convention for road transport, Montreal Convention for air transport). The actual value of your item is not taken into account.
- Goods Insurance (Ad Valorem): This covers the declared value of the item. If you lose a 2kg computer worth €2,000, you will be reimbursed €2,000, not €23/kg.
The main types of transport insurance
Depending on your business and your flows, there are several types of contracts available to cover freight.
Road, sea, and air transport insurance
- Road Transport: Essential for domestic and intra-European flows. It covers the risks of theft at rest stops or road accidents.
- Marine & Air Cargo Insurance: Essential for international import/export. It covers specific risks such as general average (for marine transport) or damage related to pressure and temperature variations (for air transport).
Ad valorem insurance (valuation of goods)
Insurance Ad Valorem insurance is the most protective form. It covers the goods based on their declared value (usually the sale price or cost price + freight + 10% expected margin).
This is the preferred solution for high value-added products (high-tech, luxury goods, pharmaceuticals) or lightweight products, for which compensation based on weight is insignificant.
Travel contract vs. subscription contract
- Travel insurance (third party): You insure a specific shipment. This is often the option offered by carriers at the time of shipment ("Check the insurance box"). It is flexible but often expensive and limited in terms of Limits
- "Floating" policy or subscription (third-party manager): You insure all your flows through a partner such as Claisy. This allows you to negotiate lower rates, automate coverage, and standardize claims management regardless of the Carrier .
What does cargo insurance cover?
A good "All Risks" insurance policy covers material damage and weight loss suffered by the goods during transport.
Common warranties include:
- Breakage, crushing, wetness
- Theft (total or partial) and looting
- Fire, explosion
- Transport accidents (derailment, shipwreck, plane crash)
- Common damage (contribution to maritime losses)
Typical exclusions to be aware of
No insurance covers everything. The standard exclusions (often listed in the Insurance Code) are:
- Faulty packaging: If your package is not packaged according to best practices, the insurer will refuse compensation.
- Natural spoilage: A product that deteriorates on its own (e.g., fruit that rots, fermentation).
- Intentional fault of the insured
- Certain sensitive goods (jewelry, cash, furs) often require specific agreements.
How much does cargo insurance cost?
The cost (premium) depends on the nature of the goods, the destination (risk areas), the mode of transport, and your claims history.
- Via Carrier Often flat rates (e.g., €10 for €500 coverage) or high rates (1% to 3%)
- Via Spécialiste (Claisy): An optimized ad valorem rate, generally around 0.75% of the declared value, with no hidden fixed costs .
Sectors for which transport insurance is essential
For some sectors, insurance is not an option; it is a lifeline for operating margins.
- E-commerce & Retail: Customer satisfaction depends on prompt refunds in the event of a dispute.
- High-Tech & Electronics: Highly sought-after products that are easy to resell and fragile
- Luxury & Fashion : The high unit value renders Limits ineffective.
- Industry & B2B: The loss of a critical part or prototype can halt a production line.
Domestic, European, and international transport
Risks vary depending on geography.
- National: Main risk = Breakage and theft during "last mile" delivery
- International: Increased risks due to transshipments (multiple handling), customs storage, and long journeys. International cargo insurance is crucial here to cover "door-to-door" shipping.
How to choose your cargo insurance
Key selection criteria
Don't just look at the price. Compare:
- Limits Does your insurer cover up to €100,000 per package like Claisy, or does it stop at €1,000?
- Speed of Compensation: Waiting three months for a Carrier investigation Carrier your cash flow. Claisy aims for reimbursement within 72 hours.
- Universality: Does your insurance cover you regardless of the Carrier DHL, UPS, FedEx, USPS)?
Best practices before subscribing
- Map your flows: Identify your riskiest routes
- Check your Incoterms: In B2B, do you know who bears the risk? (E.g., in EXW, it is the buyer; in CIP, it is the seller who must insure).
- Audit your packaging: It is the first line of defense and a prerequisite for compensation.
Claims management process
Responsiveness is key.
- Upon receipt: The recipient must make specific reservations on the delivery note if the package is damaged.
- Gathering evidence: Photos of the package, label, merchandise, purchase invoice
- Declaration: To be done within 3 days (usually) via your management interface
Conclusion: Don't let transportation be the weak link
Freight insurance is not just an administrative formality; it is a lever for profitability. By shifting from a "take the risk" approach ( Carrier liability) to a "guarantee the value" approach (ad valorem), you protect your balance sheet and your brand image.
Are you shipping valuable items? Secure them.