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Cargo and Carriers Policies: What You Need to Know


These marine insurance policies are often confused, so we explain the difference in this article and infographic.

Transport is risky, and savvy operators always carry insurance to protect themselves against fire, theft, accidental damage and other risks. The right policies can protect your business against financial losses, help you avoid reputational damage and quickly get your business back to trading as usual after an incident.

Depending on your role in the supply chain, business risks and operating environments, you’ll need different policies to get the protection you need. There are significant advantages to having all your cover with one provider – for one, it helps avoid delays in settlement if there’s a dispute about which policy covers a loss – but regardless of the specifics, there are usually two key policy types in play: cargo and carriers.

Both policies protect goods against physical loss and damage. The key difference is who takes out the policy and who it protects. In short, cargo owners hold cargo policies and transport operators hold carriers policies. 


As noted, cargo owners hold cargo policies. The cover applies to all the goods they ship and protects against loss or damage while in transit. Cargo policies are usually annually renewable and may also be available for single transits. This last option may apply when an unusual cargo is involved, for example, a high-value or high-risk cargo, or one requiring complex or unusual shipping procedures. Accidental damage and insured perils options may also be available.


Similarly, transport operators hold carriers policies to cover the goods they carry for clients – while they’re in transit. They’re only available as annual products. It’s important to be clear about what cargo types a policy covers; exclusions or additions may protect specific cargos such as livestock or motor vehicles. Accidental damage, insured perils and legal liability options may also be available. 

As with any insurance policy, it’s critical to ensure you hold the right cover to protect against foreseeable business risks. If you’re unsure about your existing cover or would like to review your policies, talk to us or your broker, or visit our Transport and Marine Protect pages to learn more.