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Benefits of Marine Cargo Insurance: The Defense You Need

February 9, 2023
 By Jacob Lee
Benefits of Marine Cargo Insurance: The Defense You Need
Last Modified: June 2, 2023
There are many dangers in ocean shipping that could cause damage or loss to freight. Fortunately, the benefits of marine cargo insurance will rectify these problems.

The benefits of marine cargo insurance aren’t always obvious until it’s too late. As reliable as vessel transportation can be, the possibility of disaster always lingers with every shipment. Insurance can protect ocean freight shippers in more ways than one when they import or export their goods.

According to the data organization FreightWaves, ocean freight cargo can fall overboard or even catch on fire. The benefits of marine cargo insurance for importers and exporters include:

  • Cost savings
  • Wide Coverage
  • Reassurance that goods are protected
  • Easier Claim Filing 

These benefits are crucial for protecting your business.

We’ll cover the benefits of marine cargo insurance and some of the dangers that will make you want to obtain it.  

A cargo ship waiting to be loaded at a port

What Are the Dangers of Ocean Shipping?

Ocean shipping is the most common form of transportation used in international trade. Transit times might be long, but it’s a reliable and economical way to send goods overseas. Nonetheless, transporting goods overseas via vessel does come with certain dangers.

The following scenarios often can cause damage or loss of ocean freight:

  • Containers falling overboard
  • Freight catching fire during loading or unloading
  • Mishandling of freight
  • The sinking of an entire vessel
  • A reefer container malfunctioning

Maritime accidents fluctuate  from year to year, but the data shows that there’s always a chance your shipment could be caught in one.

Ocean Freight Losses the Past Five Years


Source: Insurance Information Institute

Shippers, port workers and vessel crew members do their best to prevent these scenarios from happening. That said, accidents can still occur and being prepared for them is imperative.

A cargo ship going under a bridge

What Are the Benefits of Marine Cargo Insurance?

Marine cargo insurance is mainly known for the benefits it offers to shippers after their freight sustains damage. However, marine insurance is helpful even when  freight arrives perfectly safe. 

Each of these benefits makes ocean freight shipments a smoother experience for shippers to go through. 

Cost Savings 

Before an international transaction is made, importers and exporters decide who is responsible for the goods while they’re in transit. Regardless of who it is, marine cargo insurance can save them an exceptional amount of money if loss or damage occurs. 

Marine cargo insurance can reimburse the importer or exporter for any financial losses that the shipment sustains. Additionally, marine insurance covers the cost of shipping. Insurance companies are always willing to negotiate the amount of the deductibles with importers and exporters, which makes the cost of insurance more reliable. 

Our article on marine cargo insurance costs will show you how much this form of freight protection will cost you.

Wide Coverage

Having the appropriate amount of coverage is important since there are so many dangers that threaten ocean freight shipments. Marine cargo insurance is designed to cover a wide range of events.

Marine cargo insurance can provide financial protection from: 

  • Vehicle accidents
  • Cargo lost at sea
  • Freight abandonment
  • Acts of war
  • Piracy
  • Fire 
  • Jettisoned freight

This wide range of risk coverage gives importers and exporters the comfort of knowing that they’ll be compensated for most kinds of undesirable scenarios.  

Reassurance That Goods Are Protected

Shipping freight can be a very stressful endeavor. This stress is only amplified when the freight being transported is of high value and when the final destination is half a world away. Marine cargo insurance can provide shippers with a sense of reassurance and peace of mind. 

Even if something goes wrong, shippers know they won’t be left in financial ruin. 

Easier Claim Filing

Another benefit of  marine cargo insurance is that making a claim is easy to do. Marine cargo insurance policies outline the steps that importers and exporters have to take if their freight suffers damage while in transit. This makes it easier for them to obtain the financial compensation that they’re owed. 

When filing a claim, you will need to follow these steps:

  • Inspect the cargo
  • Minimize additional loss or damage by preserving the cargo
  • Contact your insurance provider and give them the following information:
    • Inventory number provided by the insurance company
    • The location of the freight before it was packed
    • Description of the freight including the age, date and when it was bought
    • What kind of damage it suffered
    • The original cost of the freight
    • Claim amount to repair or replace the freight
  • Contact other related parties if applicable

While these steps might seem lengthy, insurance companies are always willing to help you through these steps so that you can successfully file your claim. 

Does Marine Cargo Insurance Protect Goods Once They Reach Land?

The coverage provided by marine cargo insurance no longer applies once the shipment reaches land. However, there is another type of marine insurance that protects goods when they’re being moved by another mode of transportation. This type of policy is called inland marine insurance, and it extends coverage to goods transported by land and rail. 

Inland marine insurance has many of the same benefits as normal marine insurance. This allows importers and exporters to have full protection for the entirety of the shipping process. 

A cargo ship tipping over during a storm

Do You Always Need Marine Cargo Insurance?

Marine cargo insurance is not a legal requirement for shipping freight internationally. That said, there are quite a few reasons why importers and exporters choose to insure their ocean freight shipments anyways. 

These reasons include:

  • The dangers associated with ocean freight transportation
  • The Incoterms® decided upon between the importer and exporter states one needs to provide insurance

As we’ve already mentioned, many risks accompany importing and exporting. These risks influence international shippers to obtain protection for their goods. In some cases, buyers and sellers rely on Incoterms to determine who is responsible for insuring the shipment. 

Incoterms are guidelines that two parties abide by when they’re conducting a transaction. Some of them determine which party is responsible for insuring the goods. If one of these Incoterms is used, the party responsible for insuring the goods will need to abide by them or risk breach of contract .  

Freight Insurance Coverage Can Protect Your Maritime Shipments

Freight Insurance Coverage will protect all shipments that you book with us. International and domestic shipments are given a supreme level of protection. You won’t have to worry about asking us to apply insurance to your shipments. 

We immediately apply insurance coverage to all the goods we ship for our customers. The price of the insurance is then factored into the overall shipping cost and reflected in your quote.

If you’re ready to ship your goods with the protection they deserve and need, then fill out a risk-free quote today. You can also contact our team members at (866) 975-2713 with any questions or concerns. 

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