Cargo Insurance Services

Cargo insurance helps manage the risk to goods in transit by sea, air or land. Actual cover depends on the type of goods, route, sum insured, policy conditions and the insurer’s exclusions.

KTC Global Logistics coordinates insurance for import and export shipments. We gather the cargo details, value, route and transport mode, then check the conditions and premium with the insurer or relevant provider before the policy is issued.

For an initial check, send the commercial invoice, packing list, commodity, goods value, origin and destination countries and transport mode before booking or before the goods start moving.

What is cargo insurance?

Cargo insurance covers loss of or damage to insured goods in transit, according to the perils, conditions, period of cover and exclusions stated in the policy.

Having insurance does not mean every loss will be paid, because the cause of damage, the scope of cover, exclusions, packing and other policy conditions all have to be considered.

In Thailand, the Office of Insurance Commission (OIC) sets rules on policy forms and premium rates for international and domestic cargo insurance. International cargo policies may use wording based on IUA and Lloyd’s Market Association clauses under the set criteria.

Why should shipments consider cargo insurance?

Because the liability of a carrier or freight forwarder is not necessarily equal to the full value of the goods, and damage can happen at several stages of the journey.

A shipment may go through pickup from the factory, loading onto a truck, terminal handling, loading onto a vessel or aircraft, transshipment, unloading and final delivery, each with different risks.

Cargo insurance is a tool for managing the financial risk to the goods, but it should be considered together with packaging, route, carrier and handling. It does not replace preparing the goods properly for transport.

Does cargo insurance cover sea, air and land transport?

Insurance can be arranged for different transport modes, but check that the policy actually covers the mode of transport and the parts of the journey you need.

Marine cargo insurance

It can be used for imports or exports by sea freight, both FCL and LCL, under the insurer’s acceptance conditions.

What is insured is generally the goods or the insured interest. Do not assume a cargo policy automatically covers the container itself.

Air cargo insurance

Cover can be checked for air freight shipments such as spare parts, machinery parts, electronics or commercial cargo. The insurer considers the type of goods, value, route and other conditions.

Land cargo insurance

Insurance can be checked for domestic trucking and cross-border trucking, but the policy form and conditions may differ from international sea or air cargo insurance.

If the shipment uses several modes, such as truck from the factory → vessel → truck at destination, give the full route from the start so it can be checked whether each leg is covered.

What are Institute Cargo Clauses (A), (B) and (C)?

Institute Cargo Clauses (ICC) are standard condition sets widely used in international cargo insurance. Clauses (A), (B) and (C) give different scopes of cover.

In general, ICC (A) gives wider cover than ICC (B) and ICC (C), but it should not be called “cover for every risk with no exclusions”, because even ICC (A) has exclusions and conditions.

Insurers may combine Institute Cargo Clauses with extra conditions, such as war, strikes or specific product and route terms, so read the schedule, clauses, endorsements and exclusions of the policy actually issued before shipping.

The OIC provides reference material on Institute Cargo Clauses and the rules for international cargo policies, available from the Office of Insurance Commission (OIC).

What does cargo insurance cover?

The answer comes from the actual policy, not the name of the insurance, because the perils covered differ by the clauses and conditions chosen.

Before the policy is issued, check at least:

• Whether the insured goods match the actual commodity
• Where cover starts and ends
• The mode of transport stated
• The sum insured
• The Institute Cargo Clauses or main conditions used
• Any deductible or excess
• War and strikes cover, if relevant
• Product-specific exclusions
• Packaging requirements
• The period or conditions for cover to end

“We have insurance” is not enough to say whether a particular loss will be paid. The conditions of the policy or certificate issued for that shipment must be read.

How is the sum insured calculated?

The sum insured is not always set from the commercial invoice alone. It must follow the value basis and conditions the insurer accepts for that shipment.

In international shipping, the sum insured is often based on the goods value, freight and an agreed percentage uplift, but no single formula should be treated as standard for every policy.

Information to send for assessing the sum insured:

• Commercial invoice value
• Currency
• Freight, if it is part of the value basis
• Incoterms
• Origin and destination countries
• Commodity
• Mode of transport
• The cover you need

The final sum insured and premium are decided by the insurer under its conditions. Do not assume the percentage used for a previous shipment automatically applies to a new one.

How is the cargo insurance premium calculated?

The premium is based on the sum insured, type of goods, route, transport mode, scope of cover and the insurer’s other underwriting factors.

Factors that may affect the rate include:

• Value and sum insured
• Commodity
• Packaging
• Origin and destination countries
• Sea, air or land transport
• Route and transshipment
• FCL or LCL
• Cover conditions
• Deductible or excess
• Loss history or specific risks of the goods and route under the insurer’s criteria

So send the shipment details to check the actual rate, rather than estimating the premium from the goods value alone.

What information is needed before requesting insurance?

Send complete cargo, value, route and transport details before the goods start moving, so it can be checked whether the risk can be accepted and the policy issued under the conditions.

Initial information or documents to prepare:

• Commercial invoice
• Packing list
• Commodity or cargo description
• Goods value and currency
• Number of packages and packaging type
• Country of origin
• Start point and destination of the shipment
• Mode of transport
• Vessel, flight or truck information, if available
• Bill of lading or air waybill, if already issued
• Cargo ready date or estimated departure date
• Incoterms

Before booking you may not have a B/L or AWB yet, and you do not need to wait for them. The booking, route and shipment details you have can be used to start the initial check.

Which goods should be declared in particular before requesting insurance?

Goods with specific risks, high value, fragility, perishability or dangerous goods status should be described in full before you ask for a quote.

Examples include:

• Machinery and heavy machinery
• Electronics and high-value goods
• Goods that break or are damaged easily
• Food and perishable goods
• Temperature-controlled goods
• Chemicals and dangerous goods
• Batteries
• Used goods
• Goods with special packaging
• Oversized or project cargo

These goods can still be insured, but the insurer may ask for specifications, photos, packaging details or a survey, or set extra conditions and exclusions before accepting the risk.

When does the policy start to cover the goods?

Check the duration clause and details in the policy or certificate actually issued. Do not set it from the B/L date or sailing date alone.

Some cargo policies give transit cover from when the goods start moving from a named place, continuing along the route to a defined end point, but the details follow the policy’s clauses and conditions.

If you want cover for pickup from the factory or inland transport before the port or airport, give the real origin and full route when you ask for insurance. Do not assume those legs are already included.

Should insurance be arranged before or after booking?

Check the insurance conditions before the goods start moving, especially for high-value shipments or goods with specific risks.

You can request a quote while preparing the booking using the invoice, packing list and initial route, then update the vessel, flight, B/L or AWB when the information is ready, as the insurer requires.

Do not wait until the goods are damaged or have already departed to arrange insurance retroactively, because acceptance follows the insurer’s rules and review.

What should you do if goods are damaged in transit?

Keep the evidence and notify the parties involved quickly. Do not discard the goods, packaging or evidence of damage before checking the claim requirements.

Initial steps to consider:

1. Photograph the goods and packaging before moving or altering anything
2. Record the nature, quantity and extent of the damage
3. Keep the cartons, pallets, wooden cases or other packaging involved
4. Notify the carrier, forwarder and insurer or coordinator promptly
5. Keep the commercial invoice, packing list, B/L or AWB and delivery documents
6. If there was a damage remark or exception at delivery, keep that evidence
7. Arrange a survey if the insurer requires one
8. Prepare the claim documents the insurer asks for

Time limits and notification steps may be set in the policy or the insurer’s documents, so check them as soon as you find damage. Do not wait until everything is collected before reporting the incident.

How does KTC help with cargo insurance?

KTC coordinates the shipment information and arranges insurance within the agreed service, but the insurer decides acceptance, conditions and premium, and issues the policy under its own rules.

The service scope can include:

• Gathering shipment details for the insurance request
• Coordinating an initial premium and conditions check
• Checking cargo and route details before submission
• Coordinating the sum insured
• Coordinating the issue of the policy or certificate
• Passing on any extra information or documents the insurer needs
• Helping coordinate initial documents if a loss occurs, within the service scope

Cover, acceptance and claim payments follow the policy conditions and the insurer’s decisions. They are not guaranteed by KTC Global Logistics.

Frequently asked questions about cargo insurance

How is the cargo insurance premium rate calculated?

It depends on the sum insured, commodity, route, transport mode, packaging and cover conditions, as well as the insurer’s criteria, so it is checked per shipment.

Must the sum insured always be invoice + freight + 10%?

Not always. That basis is common in some international shipments, but the actual sum insured must follow the policy conditions and the insurer’s acceptance. Do not use one formula for every shipment.

Does ICC (A) mean everything is covered?

No. ICC (A) is wider than ICC (B) and ICC (C), but it still has exclusions and conditions, so check the policy wording and endorsements actually issued.

Does cover start when the goods leave the factory?

It can, if that origin and transit leg fall under the policy conditions, but check the duration clause and the named start point. Do not assume it is covered automatically.

Can LCL and FCL shipments be insured the same way?

Both LCL and FCL can be checked for insurance, but the insurer may assess the goods, packaging, route and risk differently for each shipment.

If the carrier damages the goods, do I still need cargo insurance?

Carrier liability and cargo insurance cover are different things, and carrier liability may be limited by the terms of carriage or applicable law. Do not assume using a carrier alone replaces insuring the value of the goods.

Who should be notified first if goods are damaged?

Notify the parties involved quickly, including the carrier, forwarder and insurance coordinator, and keep evidence of the goods and packaging. Then follow the insurer’s claim procedure.

Can insurance be arranged after the goods have departed?

Do not assume it can be arranged retroactively. The details must be declared and reviewed by the insurer under its rules first. The right approach is to arrange insurance before transit starts.