From the moment cargo leaves the factory until it reaches the buyer, it is exposed to storms, road accidents, theft, rough handling and dozens of other hazards. A carrier's legal liability rarely comes close to the real value of the goods, which is why all-risk cargo insurance is one of the most important safeguards an exporter or importer can arrange. At Özd Global we move freight from Gebze to destinations across the world, and we encourage every client to plan the insurance side of a shipment as carefully as the routing. This guide explains what all-risk cover means, what it pays for, what it leaves out and how the premium is calculated.
What Is All-Risk Cargo Insurance?
Cargo insurance protects goods against physical loss or damage while they are in transit. "All risk" is the widest version of that protection, known internationally as Institute Cargo Clauses (A). A narrow policy only responds to the perils it lists, such as sinking, fire or stranding. An all-risk policy works the other way round: any sudden, external event is covered unless the policy explicitly excludes it.
This "named exclusions" logic is a major advantage for the insured party. In a claim you do not have to prove exactly how the damage occurred; you only need to show that it happened during the insured voyage.
What Does All-Risk Cover Include?
A typical all-risk cargo insurance policy responds to loss or damage arising from:
- Collision, overturning or sinking of the carrying vehicle or vessel
- Fire, explosion, heavy weather and seawater ingress
- Dropping, crushing or impact during loading, unloading and transhipment
- Theft, pilferage and non-delivery of all or part of the consignment
- Damage to the contents even where packaging has been opened by an external cause
- The insured's share of general average and salvage charges
Cover is normally arranged on a "warehouse to warehouse" basis, so a single policy protects the goods from the seller's premises to the buyer's, across every road, sea and air leg. When you book sea freight with us, we can plan the insurance structure alongside the routing.
Optional Extensions
Standard all-risk wording excludes war and strikes. Both can usually be added through the Institute War Clauses and Institute Strikes Clauses for a modest additional premium, and we strongly recommend them for shipments into politically sensitive regions.
What Is Excluded?
"All risk" does not mean "everything". The international clauses carve out a set of standard exclusions:
| Exclusion | What it means |
|---|---|
| Wilful misconduct of the insured | Deliberate damage or gross negligence |
| Insufficient packing | Packaging unfit for the mode of transport |
| Ordinary leakage, wear or loss in weight | Evaporation, drying, natural shrinkage |
| Loss caused by delay | Lost market, penalties, consequential loss |
| Inherent vice | Defects within the goods themselves |
| Insolvency of the carrier | Can be insured separately |
Most of these can be managed through preparation. Checking packing quality during the warehousing and distribution stage significantly reduces the chance of a claim being rejected.
Tip: Finalise the policy before the goods depart and set the insured value at CIF value plus ten percent. This widely used convention ensures that expected profit is also compensated if the shipment is lost.
How Is the Premium Calculated?
The premium for all-risk cargo insurance is expressed as a rate per thousand of the insured value. The rate depends on the type of goods, packing, mode of transport, route, shipment frequency and the shipper's loss history. Fragile, high-value or theft-prone products attract higher rates, while containerised, well-packed general cargo is usually insured at very reasonable levels.
In practice there are two ways to buy cover:
- Voyage policy: Issued for a single shipment; suitable for occasional exporters.
- Open (annual) policy: All shipments during the year are automatically covered under one agreement; cheaper per shipment and operationally simpler for regular exporters.
Because rates vary between insurers and with market conditions, we advise obtaining a current quotation before building the cost into your pricing.
Incoterms and Who Must Insure
Which party arranges insurance depends on the delivery term in the sales contract. Under CIF and CIP the seller must insure, and CIP now requires cover at the all-risk level. Under FOB, FCA or EXW the buyer carries the risk and should arrange the policy. Whichever point the risk passes to you, make sure all-risk cover is in force from that point onward. Our customs clearance team can help you weigh how the choice of Incoterm affects both insurance and customs responsibilities.
What to Do When Damage Occurs
Acting quickly and documenting everything is the key to a successful claim:
- Note the damage on the delivery document (CMR, bill of lading or delivery receipt).
- Photograph the damaged packaging and goods and keep them as they are if possible.
- Notify the carrier in writing within the applicable time limits.
- Notify the insurer and request a survey.
- Compile the invoice, packing list, transport document and damage report.
Özd Global's operations team supports clients through this process, assembling the paperwork and handling communication with the carrier on your behalf.
Frequently Asked Questions
Is all-risk cargo insurance compulsory? No, it is not required by law. However, carrier liability limits are often far below the value of the goods, so for high-value or long-distance shipments it is close to standard practice. Banks almost always require an all-risk policy in letter of credit transactions.
The carrier already has liability insurance. Do I still need cargo insurance? Yes. Carrier liability insurance pays only where the carrier is at fault and only up to the limits set by international conventions. All-risk cargo insurance covers the full insured value regardless of fault.
Should we buy the policy ourselves or through the logistics provider? Both options work. Özd Global can arrange a shipment-specific all-risk policy through partner insurers for clients who ask for it, while regular exporters often prefer their own open policy.
Do not leave the value of your cargo to chance. Combined with well-planned transport, all-risk cargo insurance makes your export and import operations predictable. Visit our contact page or call +90 551 462 41 34 for a quotation and insurance advice; the Özd Global team in Gebze is ready to move your goods safely anywhere in the world.
