Ocean Marine & Cargo Insurance
Ocean marine and cargo insurance covers goods and merchandise while in transit by sea, air, or land — from the point of origin to the final destination. Businesses that import or export goods, ship products to customers, or receive materials from suppliers bear exposure to loss during transit that standard commercial property policies do not cover. Cargo insurance ensures that the value of goods in transit is protected regardless of the carrier's liability limitations.
Types of Ocean Marine Coverage
Ocean marine is a broad category of coverage that includes several distinct product lines:
- Cargo insurance — covers the goods and merchandise of importers, exporters, and manufacturers while in transit by vessel, air, or land conveyance
- Hull insurance — covers physical damage to vessels, including commercial ships, barges, and other watercraft
- Protection and indemnity (P&I) — liability coverage for vessel owners and operators for third-party injury, death, and property damage arising from vessel operations
- Freight and logistics liability — liability coverage for freight brokers, forwarders, and non-vessel operating common carriers (NVOCCs) for errors and losses arising from their logistics operations
Carrier Liability Limitations
A critical reason to carry cargo insurance is that ocean carriers, air carriers, and trucking companies all operate under liability limitations established by international conventions and domestic law that significantly restrict their financial responsibility for cargo losses. The carrier's liability for a damaged shipment may be a fraction of the actual value of the goods. Without cargo insurance, the difference between the carrier's payment and the true value of the lost or damaged goods is the shipper's uninsured loss.
Industry Considerations
Ocean marine and cargo coverage is relevant to a much wider range of businesses than those directly involved in international shipping. Manufacturers who source materials from overseas suppliers, retailers who import finished goods, distributors who ship nationally by truck or rail, and exporters who sell into foreign markets all face cargo exposure. The terms of sale (Incoterms) that govern your commercial contracts determine who bears the risk of loss during each leg of transit, and understanding those terms is essential to identifying where your cargo exposure lies. Etowah Insurance Group can help evaluate your transit exposure across all modes of transportation and find cargo coverage that protects your supply chain.
