WHY CARGO INSURANCE MATTERS
Transporting goods—domestically or internationally—always involves risk. Cargo can be lost, damaged, delayed, or destroyed due to weather events, accidents, theft, equipment failure, or circumstances beyond anyone’s control. While carriers do have some legal responsibility, their liability is limited and often falls far short of the actual value of your goods.
Cargo insurance exists to close this gap. It protects the full value of your shipment and helps ensure financial stability when the unexpected happens.
KEY POINTS
Is Cargo Insurance Required?
Cargo insurance is not legally required. However, it is strongly recommended for most shipments. Without it, shippers risk absorbing significant financial losses if cargo is damaged or lost.
Even when a carrier is found liable, compensation is usually capped. For example:
Ocean carriers are typically limited to $500 USD per container or shipping unit, whichever is less.
The definition of a “unit” can be disputed—one container versus hundreds of cartons—often resulting in minimal recovery.
When cargo value exceeds these limits (which is common), insurance becomes essential.
Understanding Carrier Liability Limits
Carriers operate under international conventions and laws that limit their financial responsibility.
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Governed by the Warsaw Convention
Liability limits:
$9.07 USD per pound (international)
$0.50 USD per pound (domestic)
Declared value may help, but recovery is often slow and complex.
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Governed by COGSA / Hague Rules
Liability limited to $500 USD per shipping unit
These regulations were created decades ago and no longer reflect modern cargo values or shipping realities.
Risks Commonly Faced in Cargo Transportation
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Severe weather and natural disasters
Rough handling or hook damage
Equipment failure
Cargo theft and piracy
Fires, spills, and sinking vessels
War, terrorism, and political unrest
General Average events
These risks exist across all modes of transportation and regions of the world.
What Carriers Do Not Cover
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Acts of God (storms, earthquakes, floods)
Acts of public enemy (war, terrorism)
Acts of public authority (government seizure or quarantine)
Inherent vice (natural deterioration of goods)
Shipper fault or improper packaging
Situations where reasonable care was demonstrated
If a loss falls outside carrier liability, recovery may be impossible without insurance.
General Average: A Shared Risk
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If declared:
All cargo owners aboard the vessel must share the cost
Cargo may be held until payment or security is provided
The process can be lengthy and expensive
Cargo insurance can cover General Average contributions and prevent cash-flow disruptions.
Incoterms® & Insurance Responsibility
Understanding Incoterms® 2020 is critical in determining when risk transfers from seller to buyer.
Key point:
Under CIP (Carriage and Insurance Paid To), default coverage was increased to All Risk protection
Incoterms define liability boundaries—but they do not guarantee sufficient insurance coverage unless explicitly arranged.
Key Factors When Choosing Cargo Insurance
When evaluating coverage, consider the following:
Incoterms®
Clarify who is responsible for insurance at each stage of the shipment.
Contractual Liability
Review contracts carefully to understand where risk transfers during transit.
Transportation Route
Infrastructure and handling standards vary by region, increasing risk exposure in some areas.
Inspection at Delivery
Signing proof of delivery without noting damage may invalidate future claims. Inspections should always occur before acceptance.
What Is the Best Coverage Option?
Juno Logistics offers All Risk Cargo Insurance designed to safeguard your shipments and simplify the claims process. Recovering losses from carriers is often time-consuming and costly.
The most effective protection is All Risk Cargo Insurance, which covers physical loss or damage from external causes while goods are in transit.
This type of coverage protects the actual value of your cargo—not just limited liability amounts.
Key Benefits
Comprehensive coverage for a broad range of risks
Full-value protection, beyond carrier liability limits
Streamlined claims handling, managed by Juno
Regulatory compliance with international standards
Peace of mind, allowing you to focus on your business
Cargo insurance is more than a policy—it is a strategic safeguard for your supply chain.
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Copies of all Bills of Lading (ocean, air, and inland freight).
Commercial invoice(s) covering the full shipment.
Packing list(s) associated with the shipment.
Signed Proof of Delivery (POD) from the consignee.
Damage assessment documentation:
If repairable: a written repair estimate.
If deemed beyond repair: a written statement from a certified technician, when available.
Photographs clearly showing the damaged goods and packaging.
Relevant correspondence or reports related to the shipment, including any details concerning transit, loss, damage, or coverage.
Certificate of Insurance, if applicable, issued by the insuring company.
Cargo Claim Checklist of Documents
Note: If Juno Logistics managed your shipment door-to-door, certain documents may be available through your assigned Customer Service Representative.
The Bottom Line
If your cargo value exceeds carrier liability limits, cargo insurance is not optional—it is essential. It protects your revenue, minimizes disputes, and ensures continuity when unforeseen events occur.
How Juno Supports You
We are here to help you understand your risks, secure the right coverage, and manage claims efficiently so your business stays protected.
Contact us at info@junologistics.com to schedule a consultation and ensure your trade operations stay safe and secure.
