Marine and cargo insurance (also called inland marine and ocean marine) covers goods and merchandise in transit and in temporary storage against physical loss or damage. Ocean marine covers international shipments by vessel, including hull coverage for the ship and cargo coverage for the goods. Inland marine covers domestic shipments by truck, rail, and air, as well as goods in transit between locations. Coverage extends to raw materials, components, finished goods, and equipment being transported.
Any business that ships goods domestically or internationally. This includes importers, exporters, manufacturers shipping finished products, retailers receiving inventory, and logistics companies responsible for goods in their care. Businesses with high-value single shipments, international supply chains, or temperature-sensitive cargo have the greatest need for specialized marine coverage. Companies selling on CIF (Cost, Insurance, Freight) terms are contractually required to provide marine coverage.
Marine cargo policies can be written on a per-shipment basis or as open cargo policies covering all shipments during the policy period. Open cargo policies require the insured to declare shipments (monthly or quarterly) and pay premium based on actual values shipped. Coverage is typically all-risk (special form) with specific exclusions for inherent vice, delay, and war/strikes. War and strikes coverage is available by separate endorsement or policy.
Marine cargo limits are set per shipment or per conveyance. Open cargo policies include a maximum per-conveyance limit (often $500K-$5M) with an annual aggregate. Deductibles range from $1K to $25K per shipment. Premium is based on commodity type, shipping routes, annual shipping volume, claims history, and packaging methods. Average premium rates range from 0.1% to 1.5% of total shipped values.
A wholesale distributor's container shipment from Asia sustained $680K in water damage when the vessel encountered severe weather in the Pacific. The open cargo marine policy covered the full value of the damaged goods after a $5K deductible, plus $45K in salvage and survey costs — a total claim of $720K that would have been a complete loss without marine coverage.