Marine Insurance

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Freight cargo insurance is a type of marine insurance coverage that gives protection to cargo forwarders against potential losses to the cargo that may arise from various risks. This coverage typically applies to all modes of transportation – air, road, rail, and waterways. There are various types of coverage available insurance for perishable cargo. It includes all-risk coverage, general average coverage, named peril coverage, specific peril coverage, etc. 

Depending on the types and degree of risks involved in the business and, the nature of the cargo, the cargo insurance coverage can be customised. For example, if the cargo forwarder is dealing in perishable goods, the cargo insurance coverage needs to be customised as per the need of the business considering the inherent risks involved with the cargo. 

What is perishable cargo?

Perishable goods are items that come with a limited shelf life and are prone to deterioration or spoilage. There are various types of perishable cargo. This includes- dairy products, fresh produce, flowers and plants, seafood, meat, poultry, pharmaceuticals, laboratory samples, bakery items, and more. Each of these perishable cargos requires unique types of protection, packaging, and storage systems to safely reach the destination in a shipping process. 

Perishable cargo examples: Fresh produce perishable items like fruits and vegetables are highly susceptible to temperature changes. Hence, they require temperature-controlled protection. Similarly, meat and seafood require stringent temperature-controlled protection. This is needed to ensure there is no bacterial growth or taste change, and the quality is maintained. This can also include temperature-controlled protection, storage, transit cover, and customised packaging. 

For example, a company specialises in exporting tropical fruits like mangoes, pineapples, and bananas from a country with a warm climate to various international markets. They engage a cargo forwarding service to transport their perishable goods via sea freight. Given the perishable nature of the goods, the cargo forwarder should have the cargo insurance policy specifically includes coverage for maintaining the required temperature during transit. If the refrigeration system fails and leads to temperature variations, resulting in spoilage or damage to the fruits, the insurance covers these losses. 

Cargo insurance for perishable goods

Cargo insurance can mitigate the financial impact of losses to perishable cargo from various named and unnamed perils and the inherent risks of the goods. Availing of all risk cargo insurance coverage can ensure protection against a wide range of potential risks. This includes changes in humidity, temperature variations, transit risks, spoilage, etc. 

Reasons to buy insurance for perishable cargo

The following are the important reasons that make perishable cargo insurance essential for cargo forwarders:

  • Comprehensive financial protection

The cargo insurance provides comprehensive protection against losses from various potential risks while shipping perishable goods. The cargo can be exposed to various transit risks such as natural disasters, theft, accidents, or any unforeseen events. There are also inherent risks that these type of shipping faces specific to the nature of goods. Freight cargo insurance gives financial protection against all the diverse risks.

  • Coverage against the risk of spoilage

Perishable goods are susceptive to the risk of spoilage and deterioration as they come with a limited shelf life. Hence, perishable cargo requires unique handling methods while shipping. It needs customised packaging, unique storage, temperature-controlled protection, and more. Having insurance ensures coverage for all these unique risks in case of an unforeseen incident. 

  • Legal compliance

In some regions, cargo insurance can be a compliance requirement or the trade contract may demand the need. Hence, cargo forwarders might have to avail of the coverage to stay legally compliant and adhere to the contract terms. 

  • Business continuity

The company compensates the cargo forwarder for the loss arising from covered risks in case of unforeseen events, business can continue to operate smoothly without hassles. 

  • Gain customer trust

Clients exporting perishable goods choose the freight forwarders based on the service quality offered by them. They seek assurance of a higher level of protection for their perishable cargo. Having cargo insurance coverage builds trust in clients.  

  • Peace of mind

Having a financial safety net against the potential losses that may arise from unforeseen events in a shipping business gives a sense of security. Moreover, it gives peace of mind to cargo forwarders as they can continue to operate hassle-free without having to worry about the financial repercussions.


To sum up, purchasing cargo insurance for perishable goods is a proactive measure that can safeguard the financial interests of cargo forwarders and provide reassurance to both the forwarder and their clients.

About The Author

Mayank Sharma 

MBA Finance

He is a professional who brings extensive knowledge and expertise to the field of group health insurance. He has dedicated 7years to helping individuals and businesses navigate the complexities of insurance. Having worked closely with numerous clients and insurance providers, he deeply understands the nuances of group health insurance policies. With a reputation for providing insightful and informative content, he leverages his industry experience to educate readers about the importance of group health insurance and its benefits. Through their articles, Mayank Sharma aims to empower individuals and businesses to make informed decisions about their healthcare coverage, ultimately promoting healthier and more secure communities.