GlossaryEN1 min readUpdated: Jun 25, 2026

Maritime Cargo Risk Insurance Policies

When a freight forwarder ships electronics from Hamburg to Shanghai, a maritime cargo risk insurance policy is taken out before the container leaves the warehouse.

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Last updated: 25 June 2026Published: 19 June 2025

Source: https://www.investopedia.com/terms/m/marine-cargo-insurance.asp

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Definition & Explanation

When a freight forwarder ships electronics from Hamburg to Shanghai, a maritime cargo risk insurance policy is taken out before the container leaves the warehouse. The policy covers loss or damage occurring during transit – shipwreck, collision, grounding, piracy, theft, and fire are among the standard insured perils. The scope of cover depends on the chosen clause: the Institute Cargo Clauses (ICC) A, B, and C are the market standard, with Clause A providing the broadest all-risks protection and Clause C covering only specified major casualties. Which party arranges the policy is determined by the agreed Incoterm: under CIF and CIP, the seller bears the insurance obligation; under most other terms, it falls to the buyer. Premiums are calculated on the basis of cargo value, chosen clause, and route risk; dangerous goods and high-value shipments attract noticeably higher rates. Maritime cargo insurance should not be confused with P&I (Protection & Indemnity) cover, which addresses liability claims against the shipowner or operator.