What does international cargo insurance cover?

Warehouse to warehouse: where coverage starts and ends

A common mistake is assuming cargo insurance only applies while the goods are on the ship or the plane. Warehouse-to-warehouse coverage protects the cargo throughout the entire journey: from the moment it leaves the seller's warehouse, through inland transport to the port or airport, waiting time at terminals and depots, the main international leg, customs clearance, and final delivery, until it reaches the buyer's warehouse. This matters because a significant share of claims happens precisely on inland legs and during intermediate storage, not on the high seas.

What risks "all risk" coverage includes

The broadest coverage in the international market works on a simple logic: it covers all physical loss or damage to the goods, except for the exclusions expressly listed in the policy. In practice, this includes the scenarios importers and exporters worry about most: total or partial theft, wetting by seawater or rain, handling damage at ports and terminals, impacts and rollovers in inland transport, containers lost overboard, fire, and total loss of the cargo if the means of transport suffers an accident.

It also covers concepts specific to maritime trade that often surprise newcomers. The most important is general average: when a ship's captain sacrifices part of the cargo or incurs extraordinary expenses to save the voyage —for example, during a fire on board— all cargo owners must contribute proportionally to that loss, even if their own goods arrived intact. Without insurance, the importer pays that contribution out of pocket and the cargo is held as security; with insurance, the insurer posts the guarantee and absorbs the contribution.

What "no deductibles" means

The deductible is the amount the insured must absorb out of pocket on every claim before the insurance pays. A policy with a USD 500 deductible turns small claims into unrecoverable losses and reduces the payout on large ones. No-deductible coverage means the indemnity is calculated on the full insured value of the damage: if the loss is USD 800, USD 800 is paid. For mid-value cargo and frequent low-value claims —shortages, damaged boxes, partial wetting— the difference between a policy with and without a deductible is what determines whether the insurance is useful day to day.

What cargo insurance does not cover

Like any policy, the coverage has exclusions that are standard in the international market. The most common are: inherent vice of the goods (for example, fruit that spoils by its own nature and not because of a transport failure), packing that is inadequate or insufficient for the journey, delay as such (a vessel's late arrival is not physical damage), loss of market or commercial value without physical damage, and willful misconduct by the insured. Special risks such as war and strikes (SRCC) are usually covered through additional clauses, which well-structured policies already include.

Knowing the exclusions is not a minor detail: most rejected claims in the market are due to poor packing or incomplete documentation — two factors the shipper can control before dispatch.

How it works in practice

Getting coverage does not require negotiating a policy from scratch for every shipment. Through the Proteus Cargo program, freight forwarders and customs brokers issue coverage certificates for their clients' shipments relying on a policy that is already underwritten: upload the BL or the invoice, the system reads the document with AI, you review the details, and the certificate is issued in minutes, with warehouse-to-warehouse coverage, no deductibles, on any route in the world.

Want to insure your shipments or add cargo insurance as a service for your clients? Learn more at proteuscargo.com.

Frequently asked questions