Cargo Insurance & Goods in Transit
Full cargo value instead of liability limits: ICC clauses, Incoterms insurance obligations and protection for importers, exporters and private individuals.
Do I really need this – and for which situation?
Cargo insurance (also called goods in transit insurance) protects the full value of your goods during transport – regardless of whether the goods travel by ship, truck, train or plane. And regardless of who is at fault. This is the key difference from the statutory liability of the transport company, which usually only covers a fraction of the cargo value.
I import electronics from China – value €15,000. The ship encounters a storm and the goods are damaged.
→ Without cargo insurance: max. approx. €2/kg reimbursement. With ICC (A): full €15,000.
I'm moving to Portugal. The moving company has limited liability. My piano is worth €4,000.
→ Take out removal insurance (= single policy) for the full current value. Photograph inventory beforehand!
I sell my guitar (€800) on eBay and send it by parcel service abroad.
→ Book a single policy or "declared value" with the parcel service. Without: max. €50–100 reimbursement.
I buy a smartphone for €900 from the USA. The package never arrives.
→ US retailers are not liable under EU law. Check credit card protection (Amex, Visa Signature) or use PayPal buyer protection.
Why is CMR liability not enough?
The carrier is legally liable only up to 8.33 SDR/kg (≈ €10/kg). For a laptop weighing 5 kg worth €1,500, this means a maximum compensation of €50. Cargo transport insurance covers the actual cargo value – regardless of the carrier's fault and for all modes of transport (road, sea, air, rail).
ICC Clauses A, B and C – The Comparison
The ICC (Institute Cargo Clauses) are international insurance clauses originally developed at the London insurance market. They are the worldwide standard for cargo insurance. Simply explained:
🚗 Think of the car insurance model: ICC (A) = comprehensive (all risks except explicitly excluded). ICC (B) = extended partial cover (frequent risks). ICC (C) = basic partial cover (total loss and major events only).
Broadest coverage: all risks except those explicitly excluded. Recommended for high-value goods, electronics, pharmaceuticals.
- Theft, vandalism
- Mechanical damage, breakage
- Fire, explosion, natural events
- Water ingress, sweat condensation
Medium coverage: defined list of risks. Covers damage from fire, ship accident, earthquake, flooding, but not theft or mechanical damage.
- Fire, explosion
- Ship/vehicle accident (stranding, collision)
- Earthquake, lightning, flooding
- Seawater (not freshwater)
Basic coverage: only total loss and major loss risks. Suitable for bulk goods, raw materials and inexpensive goods without theft risk.
- Fire, explosion
- Ship sinks/strands/collides
- Jettison (when cargo is deliberately thrown overboard in an emergency)
* Common exclusions of all ICC clauses: Insufficient packaging, natural shrinkage/wear, delay damage, nuclear risks, war risks (separately insurable). Equivalent AIR clauses apply for air freight.
Incoterms and insurance obligations
Incoterms = international delivery terms (e.g. CIF, FOB, DDP). They define who – buyer or seller – bears the risk for a shipment and from when. Relevant for anyone buying or selling internationally.
| Incoterm | Insurance obligation |
|---|---|
| CIF | Seller (mandatory) |
| CIP | Seller (mandatory) |
| EXW / FCA / FOB | Buyer (voluntary) |
| DDP / DAP | Seller (voluntary) |
All information without warranty. Insurance obligations may vary by contract, country and Incoterms version – please check with your freight forwarder or insurer if in doubt.
Important: Since Incoterms 2020, ICC (A) is mandatory for CIP instead of ICC (C). This significantly increases insurance coverage for importers. Recommendation: always insure +10% above the cargo value to cover additional costs (freight, customs, handling fees).
Open cover vs. single policy
Open Cover (Annual)
For businesses with regular shipments: all consignments during the year are automatically insured (declaration obligation)
- Automatic coverage – no forgetting possible
- Lower premiums through annual volume
- Simplified administration
Single Policy
For individual transports or infrequent shipments: insurance is taken out per transport
- Flexible, needs-based coverage
- No annual commitment
- Suitable for special value transports
Cargo insurance for private individuals
Private individuals also rely on transport insurance – often without knowing it. Typical situations:
International move
The moving company has limited liability under HGB/CMR. Removal insurance covers the full current value. Tip: photograph inventory before the move.
Buying a car from abroad
When transporting the vehicle (ship, truck), the carrier has limited liability. A single policy for the transport secures the vehicle value.
Art, antiques, instruments
High-value individual items require a specialist policy (Fine Art). CMR/HGB only covers per-kilo prices – never the actual art value.
Online shopping from overseas (AliExpress, US shops)
If lost, the seller often pays nothing or very little. Check own insurance or credit card protection (Amex, Visa Signature). EU consumer law only applies to EU retailers.
Calculate insured value correctly
Recommendation: cargo value + 10% surcharge (for freight, customs, handling, lost profit). If under-insured (under-insurance = you insured too little), only a proportional reimbursement is made. Example: goods €10,000, transport €500, customs €800 → insure for €12,430 (= €11,300 × 1.10).
All information without warranty – please check with your freight forwarder or insurer.