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Cargo insurance is cheap to buy and brutal to need without. When a container is dropped, water-damaged or short-landed, your claim succeeds or fails on what you did in the first 48 hours and on the paperwork you can produce. This guide covers the cover types, the claims process step by step, and why the shipping line's liability is no substitute for your own policy.
Why carrier liability is not enough
Shipping lines limit their liability under the Hague-Visby Rules to a capped amount per package or per kilogram — typically a fraction of your goods' real value. They also have wide defences (perils of the sea, inherent vice, packing faults). So even when the carrier is at fault, you may recover only cents on the rand. Marine cargo insurance covers the goods' full value directly, then your insurer pursues the carrier in subrogation.
Cover types (Institute Cargo Clauses)
| Clause | Scope |
|---|---|
| ICC (A) | All-risks — broadest cover; loss/damage from any external cause unless excluded |
| ICC (B) | Named perils — wider list (incl. water damage, washing overboard) |
| ICC (C) | Named perils — narrowest (major casualties: fire, sinking, collision) |
Insured value is usually CIF + 10% (the extra 10% covers incidental costs and lost profit). War and strikes cover can be added. For most importers, ICC (A) is worth the small extra premium.
The claims process — step by step
Do not sign a clean delivery receipt for damaged cargo. Mark the exceptions on the POD / equipment interchange receipt.
Policies require prompt notice. Report as soon as loss is discovered — delay can prejudice the claim.
Photograph damage, packaging and container seals. Keep everything as-is until a surveyor inspects. Do not discard or repair.
Hold the shipping line responsible in writing to protect your insurer's subrogation rights.
The insurer appoints an independent surveyor who quantifies the loss and reports on cause.
Provide the full document pack; the insurer assesses, applies any deductible, and pays out.
Documents you will need
- Insurance policy / certificate
- Commercial invoice and packing list
- Bill of lading
- Survey report and dated photographs
- Delivery receipt / POD showing the noted exceptions
- Copy of the claim lodged against the carrier and any reply
- Calculation of the claimed amount (with any salvage value)
Why claims get reduced or rejected
Pro tip: insure in your own name on FOB/CFR terms
On CIF the supplier insures — and you may inherit a thin policy you cannot easily claim on. On FOB or CFR, arrange your own ICC (A) cover through an SA broker so you control the policy and the claim.
Related guides & tools
- Incoterms explained — who is responsible for insurance under each term
- How to read a Bill of Lading
- Customs refunds & drawbacks — recovering duty on written-off goods
- Cargo Insurance calculator
Frequently asked questions
Is the shipping line's liability enough, or do I need cargo insurance?
Carrier liability is capped under the Hague-Visby Rules to an amount per package or kilogram — typically a fraction of the goods' real value — and lines have wide defences. Marine cargo insurance covers the full value directly (your insurer then pursues the carrier in subrogation), and at roughly 0.15%–0.30% of insured value — R300–600 on R200,000 of cargo — it is almost always the rational choice.
What should I do the moment damaged cargo arrives?
Do not sign a clean delivery receipt — note the exceptions on the POD; notify your insurer or broker immediately (late notice can prejudice the claim); photograph the damage, packaging and container seals and preserve everything untouched until the surveyor inspects; and lodge a written claim on the carrier to protect subrogation rights.
What is the difference between ICC (A), (B) and (C) cover?
Institute Cargo Clauses (A) is all-risks — the broadest cover, paying for loss or damage from any external cause unless excluded; (B) covers a wider list of named perils including water damage; (C) covers only major casualties such as fire, sinking and collision. For most importers ICC (A) is worth the small extra premium, with insured value usually set at CIF + 10%.
Why do cargo insurance claims get reduced or rejected?
The classic three: a clean receipt signed for visibly damaged goods (you waived the evidence), late notification after goods were moved or repaired, and exclusions for insufficient packing or inherent vice — which is why proper export packing should be specified in your supplier contract.