{"id":23985,"date":"2022-11-04T07:50:07","date_gmt":"2022-11-04T07:50:07","guid":{"rendered":"https:\/\/insuropedia.in?p=23985"},"modified":"2025-07-14T09:28:08","modified_gmt":"2025-07-14T09:28:08","slug":"what-is-an-air-freight-or-air-cargo-insurance","status":"publish","type":"post","link":"https:\/\/securenow.in\/insuropedia\/what-is-an-air-freight-or-air-cargo-insurance\/","title":{"rendered":"What is an Air Freight or Air Cargo Insurance?"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p><span style=\"font-weight: 400;\">Air freight is the term for when there is a shipment of goods or cargo via an air carrier. For this reason, air cargo is another common term for air freight. It is very important as it enables the transport of express shipments across the world. Often the transport of cargo across the globe takes place over maritime journeys. Air transport is a preferable option when goods need express transport without delay. It uses the same gateways as a passenger or commercial airline. This article focuses on different air transportation facilities available throughout the globe and insurance covers for the same.<\/span><\/p>\n<h2><b>The meaning of air freight<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Importers\/exporters hire air transport services to move shipments by an air carrier. The amount of money they pay for the air transport service is air freight.<\/span><\/p>\n<h3><b>Air freight \u2013 General statistics and costs<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The International Air Transport Association (IATA) is a trade association of all airlines in the world.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Their study in July 2022 reveals that air freight transports goods worth 6 trillion USD per year.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This statistic accounts for approximately 35% of global trade by value.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">During the Covid pandemic, air freight covered one-third of the revenue for airlines.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Today, air freight is near 2019 levels, lesser than the very high 2020\u20132021 levels.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The spring of 2020 saw record-high rates of air freight internationally.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In 2019, air freight from the US to foreign countries cost 6.7 million USD.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air freight costs 12\u201316 times more than sea transport and 4\u20135 times more than road transport.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">International rates for air freight may range from $2.50\u20135.00 per kg.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">International air freight rates can go as high as $8 per kg.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air carriers charge by actual weight or volumetric weight, whichever is higher.<\/span><\/li>\n<\/ul>\n<h3><b>Types of cargo transported via air\u00a0<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Two factors influence the choice to transport goods by air:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Value of the goods<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Urgency of shipment<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">High-value commodities or urgent materials require speedy shipment by air. It is also ideal for goods requiring speedy transport, like fresh food and cut flowers. Nowadays, there is greater demand for healthcare and pharmaceutical goods requiring air transport.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Air cargo falls under two broad types\u2014general cargo and special cargo.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>General cargo<\/strong> is goods that do not need special handling or extra precautions during transit. Retail and most consumer goods fall under this category. This excludes electronic gadgets like mobile phones, tablets, and laptops. Other such goods under this type are hardware, textiles, dry goods, and more.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>Special cargo<\/strong> is goods having special requirements. These requirements are for their packaging, labelling, documentation, and handling during transit. There are special regulations governing the shipment of these goods. Live animals, perishable cargo, dangerous goods, and wet cargo fall under this category. Temperature and time-sensitive goods also come under this category.<\/span><\/li>\n<\/ul>\n<h3><b>Risks involved in air freight<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Some of the risks involved in air freight are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Airlines, handling agents, and stakeholders in the supply chain not adhering to the regulations for the cargo. This can lead to loss and damage to the goods.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Perishable items may spoil if there is improper temperature management during transit.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Security threats such as hijacking put crew and cargo at risk.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Concealment of explosives undergoing transport via air cargo.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Inadequate implementation of risk-based targeting measures for detecting suspicious cargo.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Close collaboration by governments, airports, and air carriers to ensure the security of the cargo.<\/span><\/li>\n<\/ul>\n<h2><b>Air cargo insurance<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Air cargo insurance covers buyers or sellers of goods against the loss or damage of goods during air transport. It reimburses the policyholder for damaged or lost insured items. It may even offer compensation for goods facing shipment delays.<\/span><\/p>\n<h3><b>Features and benefits of air cargo insurance<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air cargo insurance is not required by law.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It offers financial protection in case of damage or loss of the cargo.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Some insurers offer reimbursement in case of unexpected delays in the delivery of goods.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It may cover the costs of replacing the damaged or lost cargo.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are limits on air carrier liability. Liability is usually only $24 per kg for air cargo carriers.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Insurers may offer comprehensive air cargo insurance. Here, they reimburse the goods\u2019 invoice value plus the freight costs.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Insurance coverage starts from the time the goods take off until they reach their destination.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It protects the cash flow of buyers and sellers from unexpected interruptions.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air cargo insurance offers peace of mind to buyers and sellers in the face of unforeseen risks.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This insurance protects the reputation and revenue of businesses. It compensates them in the event of unforeseen incidents.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air cargo insurance usually has flexible insurance rates specific to the cargo and coverage needs.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It covers natural disasters like lightning, cargo abandonment, vehicle accidents, customs refusal, acts of war, piracy, and more.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air cargo insurance has fewer exclusions compared to other insurance types.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The policyholder does not have to prove that the fault of damage or loss lies in the carrier.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Reporting loss or damage for air cargo insurance is convenient.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It has an easier claim application procedure compared to other insurance types.<\/span><\/li>\n<\/ul>\n<h3><b>Air cargo insurance <\/b><b>premiums<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Air cargo insurance does not have a fixed type of insurance premiums. Rather they vary on the basis of different factors. Air cargo insurance policyholders can optimise their insurance coverage according to their specific requirements.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The factors influencing the premium rates for air cargo insurance are<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The level of coverage the insurance policy offers<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The nature of the insured goods<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The invoice value of the insured goods<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The route the air carrier will take for the air service transport<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The final destination of the insured goods<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Any additional coverage the policyholder wants<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Size of the policyholder\u2019s business.<\/span><\/li>\n<\/ul>\n<h3><b>Exclusions under air cargo insurance<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The following are the common exclusions under air cargo insurance:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Inherent vice<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Here the damage arises from the physical nature and condition of the goods. There is an internal cause for the damage. So, the damage does not arise from any fault of the supply chain process.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Latent defect<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This is when an inspection does not reveal any problems with the product. The cause of the damage here is the lower quality of goods. For example, improper manufacturing leads to cracks in a product.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Improper packaging<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Careful packaging is crucial for air cargo, especially in the case of special air cargo. If the shipper fails to package the goods properly, it can result in damage while in transit. For example, a shipper tries to save on costs by reusing corrugated boxes. Improper packaging results in losses that air cargo insurance will not cover.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Wilful misconduct by the insured party<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Air cargo insurance does not cover losses and damages resulting from wilful misconduct by the insured party and their employees. This is essentially insurance fraud.<\/span><\/p>\n<h3><b>Claims settlement<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Most carriers have limited liability when it comes to insurance claims. So, the policyholder must prove that the loss or damage took place when the goods were out of their hands. For this, the policyholder must provide the following details:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Inventory number:<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The insurer provides the number on the inventory list. The policyholder has to provide this number when making a claim.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Item\u2019s room:<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This refers to the location of the goods before packaging takes place.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Item description:<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The policyholder must provide all descriptive information about the insured goods. This includes weight, visual cues, dimensions, and accessories.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Damage:<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The policyholder must give a detailed description of the damage or loss.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h4><strong>Date and age of the item:<\/strong><\/h4>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If the policyholder has production records, they must provide the same to the insurer. Otherwise, they give educated guesses about the age of the item and purchase date.<\/span><\/p>\n<h3><b>Major differences between marine, air cargo, and inland transit insurance<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Here are the major differences between marine, air cargo, and<a href=\"https:\/\/securenow.in\/marine-insurance\/transit-insurance-online\"> inland transit insurance<\/a>:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><\/td>\n<td><b>Marine insurance<\/b><\/td>\n<td><b>Inland transit insurance\u00a0<\/b><\/td>\n<td><b>Air cargo insurance<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Definitions<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covers the cost of damages to import\/export goods via different modes of transport. Includes coverage for the vessel and damage to ports<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covers the goods undergoing transport over land<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covers the goods undergoing transport by air transport services<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Transportation modes<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Includes sea, road, rail, or air transportation modes<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Transport via trucks or trains, and so on, only<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Only covers transport via air carrier<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Geographical location<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covers the transport of goods internationally<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covers goods undergoing domestic transport<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Can cover both international and domestic transport of goods\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Who avails of this insurance?<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Large-scale businesses and multinational companies that import\/export finished goods and raw materials<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Small to mid-scale businesses that do not partake in the import\/export of goods<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Mid to large-scale businesses that may or may not partake in the import\/export of goods<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><b>How to buy air cargo insurance?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">\u00a0To buy air cargo insurance, complete a risk assessment by our experts for your next consignment. Choose from the <a href=\"https:\/\/securenow.in\/\">best insurance policies<\/a> provided by different insurers for covering your air freight.<\/span><\/p>\n<h4><b>About The Author<\/b><\/h4>\n<p><strong>Simran<\/strong><\/p>\n<p><strong>MBA Insurance and Risk<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">With extensive experience in the insurance industry, Simran is a seasoned writer specializing in articles on marine insurance for SecureNow. Drawing from 5 years of expertise in the field, she possesses a comprehensive understanding of the complexities and nuances of marine insurance policies. Her articles offer valuable insights into various aspects of marine insurance, including cargo protection, hull insurance, and liability coverage for marine-related risks. Renowned for their insightful analysis and informative content, Simran is committed to providing readers with actionable information that helps them navigate the intricacies of marine insurance with confidence.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Air freight is the term for when there is a shipment of goods or cargo via an air carrier. For this reason, air cargo is another common term for air freight. It is very important as it enables the transport of express shipments across the world. Often the transport of cargo across the globe takes [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"no","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[313,4],"tags":[159,1359,1360],"class_list":["post-23985","post","type-post","status-publish","format-standard","hentry","category-product-features-marine-insurance","category-marine-insurance","tag-marine-insurance-policy","tag-air-cargo-insurance","tag-air-freight-insurance"],"acf":[],"modified_by":"SecureNow","_links":{"self":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/23985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/comments?post=23985"}],"version-history":[{"count":9,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/23985\/revisions"}],"predecessor-version":[{"id":31557,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/23985\/revisions\/31557"}],"wp:attachment":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/media?parent=23985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/categories?post=23985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/tags?post=23985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}