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The log · Service & process guides · 19 May 2026 · By Sherif Awad, Owner, GeoMarineHub
Cargo Insurance Basics: Declared Value, Premiums & Claims
Carrier liability is far smaller than most shippers think. Learn why you need cargo insurance, how premiums are set, the Institute Cargo Clauses (A/B/C), and how to file a claim.
Cargo Insurance Basics: Declared Value, Premiums & Claims
Carrier liability is far smaller than most shippers think.Learn why you need cargo insurance, how premiums are set,the Institute Cargo Clauses (A/B/C), and how to file aclaim.
Geomarine Freight Team
Here is the uncomfortable truth most first-time shippers discover only after a loss: the carrier's liability is tiny. Under the Hague-Visby Rules, ocean carrier liability is capped per package or per kilo — often a fraction of your cargo's real value. That gap is exactly what cargo insurance fills.
Why Carrier Liability Isn't Enough
Carrier limits are set by international conventions, not by what your goods are worth. They also exclude many events and require you to prove fault. Cargo insurance, by contrast, pays out on the insured value regardless of who was at fault (subject to the policy terms).
How Premiums Are Set
A premium is usually a small percentage of the declared/insured value — commonly the commercial invoice value plus freight plus a markup (often CIF value + 10%). The rate reflects the cargo type, packaging, route, mode and loss history. For most general cargo it is a fraction of a percent — cheap insurance against a total loss.
Institute Cargo Clauses: A, B, C
—Clause A — the broadest "all risks" cover (subject to standard exclusions).
—Clause B — named perils, wider than C.
—Clause C — the narrowest, major-casualty cover only.
Most shippers choose Clause A for valuable or fragile goods. Always check exclusions (war, strikes, insufficient packing, inherent vice).
How to File a Claim
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