GlossaryEN1 min readUpdated: Jun 25, 2026

Insurance Coverage for Freight Movement

When a consignee receives a damaged shipment and the carrier's statutory liability falls well short of the actual loss, cargo insurance fills the gap.

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Last updated: 25 June 2026Published: 19 June 2025

Source: https://www.investopedia.com/terms/f/freight-insurance.asp

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Logistics concept

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1 min

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114

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Definition & Explanation

When a consignee receives a damaged shipment and the carrier's statutory liability falls well short of the actual loss, cargo insurance fills the gap. It protects goods against loss, damage, and theft in transit—by road, rail, air, or sea—covering the financial exposure from origin through to final delivery. Three factors define a policy's practical value: the scope of cover (all-risk versus named perils), the sum insured, and the moment coverage attaches (warehouse-to-warehouse or from commencement of transit only). Cargo insurance is distinct from carrier liability: international conventions cap carrier liability at fixed amounts per kilogram or unit, and a claim requires proof of fault, whereas cargo insurance responds regardless of who is at fault.