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All Risk Cargo Insurance: Covering All Your Bases

January 12, 2023
 By Jacob Lee
All Risk Cargo Insurance: Covering All Your Bases
Last Modified: August 11, 2023
All risk cargo insurance provided comprehensive protection for all of your freight shipments. Discover more about how this insurance policy can be beneficial for you.

All-risk cargo insurance is one of many insurance plans that you can use to protect your freight shipment. There are all kinds of risks associated with shipping freight regardless of the transport mode used. Using all risk insurance will ensure that your goods are protected from whatever damages they may face. 

All-risk cargo insurance is the broadest form of insurance that you can purchase for the freight you ship. This form of insurance coverage will protect your freight from all forms of physical loss or damage caused by external forces. You can also obtain this insurance policy for any mode of transport that moves your freight.

In this article, we’ll run through some of the unique characteristics of all risk cargo insurance, exceptions to what it insures, and when you should purchase the coverage. 

An aerial view of warehouse workers moving freight

What Does A Cargo Insurance Policy Cover?

There is an assortment of cargo insurance policies that you can apply to your shipments of freight. All policies differ slightly in what they offer and what they’ll protect. That said, all insurance policies, to some degree, will provide protection against most issues.   

The three most common scenarios include:

  • Loss
  • Damage
  • Theft

Of all the insurance policies you could get, all risk cargo insurance is the one that will give you the most coverage. 

A semi truck that has passed under a highway bridge

What Makes All Risk Cargo Insurance Unique?

All risk insurance stands out from other types of insurance policies for numerous reasons. As the most comprehensive form of coverage, all risk insurance will offer you a supreme amount of protection for your goods

Broad Damage Coverage

One aspect of all risk insurance is the broad amount of damage coverage it provides. Damages or losses caused by most external factors will be covered by an all-risk cargo insurance policy. 

External factors may include any of the following:

  • Freight falling and becoming damaged in the railcar, trailer, or cargo container it travels in
  • Freight damaged by other shipments in the same railcar, trailer, or cargo container
  • Damage incurred from poor handling while loading or unloading

With all risk cargo insurance, your freight will be fully protected from these scenarios as well as many others. 

Good For Any Transport Method

Another great part about using all risk cargo insurance is that it can provide coverage for any form of shipping you use. 

Unlike other types of insurance that only protect your freight from risks specific to a certain form of shipping, all-risk will protect your freight from all risks regardless of the form of shipping.

A cargo ship preparing to leave a port

What Is the Difference Between Liability Insurance and Cargo Insurance?

If you’ve ever spent time browsing for cargo insurance, you’ve probably come across the term carrier liability. Understanding carrier liability and cargo insurance can confuse new shippers. Below, we’ll explain how carrier liability and cargo insurance differ from one another.

Liability Insurance

Carrier liability is a form of insurance coverage that’s provided by the carrier that’s transporting your freight. While carrier liability does have its benefits, it doesn’t provide nearly the same amount of coverage as all risk insurance or even other types of insurance. 

Some of the events carrier liability doesn’t cover include:

  • Concealed damage
  • Seizure by a government agency (act of public authority)
  • Inherent vice
  • Act of omission of the shipper

Another downside to carrier liability is that if your shipment does suffer damage, you will need to provide evidence that the carrier was responsible for the damage while it was in their care. 

Cargo Insurance

What makes cargo insurance stand out from carrier liability is that the protection it provides is more comprehensive. Therefore, cargo insurance is a better risk management strategy than carrier liability. 

Even with the various terms and conditions that accompany different types of cargo insurance, you’ll be protected from more scenarios with the coverage given by carrier liability. Additionally, if your freight is damaged, you won’t have to provide proof that it was damaged by the carrier.

Debris on a city street with rioters nearby

What Does All Risk Cargo Insurance Not Cover?

Even with the broad amount of coverage, you’ll receive for lost and damaged goods, all risk cargo insurance does have its exceptions. Knowing what all risk cargo insurance doesn’t cover is just as important as knowing what it does cover.

All risk insurance will not give you coverage if you’re goods are damaged due to:

  • Negligent packing
  • Acts of god (extreme weather events)

We’ll discuss these exceptions in further detail below. 

Negligent Packing

Packing your goods to the best of your ability is extremely important when shipping freight. If you’ve obtained all risk insurance to protect your goods, you’ll need to take special care that your goods are packed up correctly. 

If you lazily prepare your goods for shipping and they become damaged, your all risk cargo insurance won’t cover you for the damages. 

Acts Of God

Another scenario that all-risk insurance doesn’t protect you against is acts of god. This is just a fancy term for weather events that could cause damage to your freight. Unlike negligent packing, which is a problem you can easily avoid, you have no control over the weather. 

That said, dry van trailers, cargo containers, and railcars do offer a considerable amount of protection from weather like rain and snow. Therefore, it’ll take a severe weather event to damage your goods. 


There are a lot of unpredictable events that can happen to freight when it’s traveling into or traveling from another country. Some of these events are referred to as WSRCC. 

The acronym stands for the following:

  • War 
  • Strikes
  • Riots
  • Civil unrest

Freight that’s damaged or lost due to global logistical challenges like these won’t be covered under all risk insurance. Fortunately, you can prevent your freight from falling victim to these events to a certain degree. Before you decide to import or export freight overseas, check on the political situation in that country.

Some countries are home to a high amount of piracy. Check out our article on piracy in marine insurance to learn more.

A semi traveling down a double land desert road

When Should I Get All-Risk Cargo Insurance?

All risk cargo insurance is great, but it might not always be the best option for you depending on the specifics of your shipment. However, if you find yourself in the following circumstances, obtaining all-risk insurance would be a good idea to have. 

When Shipping Numerous Goods

Obtaining all risk insurance is a good idea when you’re shipping freight in bulk

The more goods you ship, the higher the likelihood they can be damaged as they make their way through the supply chain. All risk insurance will give your large quantity of freight the protection it needs from potential threats. 

When Shipping Far Distances

All risk insurance should insure shipments that travel long distances. Long-distance shipments have an increased likelihood of becoming damaged, especially if you’re using multiple modes of transport to move your goods.  

Each mode of transportation has unique risks that could bring harm to your freight. All risk insurance is good for any mode of transport, which means you’ll be covered for the entirety of your freight’s journey. 

The definition of long-distance varies by transport method. The perspective of time and distance has this effect.

Examples Of Long Distance Shipping

Long-Distance Truck250 miles
Ocean Freight Shipment336 miles per day
Long-Haul Flight2,550 miles

For air cargo, freight can travel for much further before it’s considered a long distance since it’s so much faster than either truckload or ocean shipping.

One thing to remember is that even if your shipment doesn’t start its journey on a truck, it’ll likely end its journey on one that’s making door-to-door deliveries. 

There are plenty of scenarios that could play out when your freight is unloaded from one mode of transport to another. All risk insurance will give you coverage for all of them. 

A cargo ship in the distance

What Are the Alternatives To All Risk Insurance?

Despite its benefits, you might find that all risk insurance just isn’t what you’re looking for. Fortunately, you can choose from other types of insurance to cover your freight and cargo shipments. 

Other types of cargo insurance you can take advantage of are:

  • Named perils insurance (formerly referred to as free of particular average)
  • General average insurance (used for maritime shipments)
  • Open cargo insurance
  • Contingency insurance

These insurance policies are good substitutes to all risk cargo insurance. They each provide unique forms of coverage that suit the mode of transport moving your freight. 

Freight Insurance Coverage Can Protect Your Cargo

When you book a load with Freight Insurance Coverage, insurance is already included in your shipment. This saves you the hassle of going out of your way to request insurance for your goods. We also factor in the cost of insurance into your quote so you don’t have to do any math to figure out what you’re actually paying. 

  • Competitive Rates
  • No Hidden Fees
  • Risk-Free Quotes

If you’re ready to ship your freight, fill out your quote below or contact our team at (866) 975-0749 for more information. 

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