What is Cargo Insurance and Why Do You Need It?

cargo insurance

Cargo insurance, also known as shipping, freight, or marine insurance, is the oldest form of insurance. It can be traced back to the Phoenicians, around 1200 BCE. You can’t argue that cargo insurance isn’t a good idea if it’s been around for 22,000 years!


Cargo insurance is insurance that guarantees coverage for any damages that could occur to your goods as they are in transit. Cargo insurance is used by companies to protect both their employees and the goods they are carrying (which is commercial cargo insurance) as well as by individuals, to protect items that they are shipping or trucking through a third party. There are many different types of cargo insurance and they vary depending on how you are shipping your cargo (via ship, via truck, etc.), what type of cargo you are shipping, and of course, by which policy maker you choose.


If you are an individual or a company wanting to hire a freight company to ship goods or commodities, even if that company has an insurance plan, it is probably important for you to get one as well. Often, these plans do not cover common losses and are instated more for the purposes of protecting their companies or employees as opposed to your rights and cargo as a client. Therefore, it is important to do research to determine whether you need outside coverage and what type of cargo coverage works best for your situation. Cargo insurance can benefit both the shipper and the receiver of items.