In the world of transportation and logistics, one reality remains constant: anything can happen during transit. From accidents and natural disasters to theft or handling errors, your cargo can face several risks before it reaches its destination. That’s where freight insurance comes in—a crucial safety net that protects your business from unexpected loss or damage.
Whether you’re a small business shipping regionally or a large enterprise managing global freight, understanding how freight insurance works can save you time, money, and stress.
What Is Freight Insurance?
Freight insurance is a policy that covers the value of goods in transit. If your shipment is lost, stolen, or damaged during transportation, freight insurance compensates you for the insured amount, minimizing your financial loss.
It is not automatically included in most shipping services. Many carriers offer limited liability coverage, which often doesn’t reflect the true value of your goods. That’s why many shippers purchase additional insurance coverage.
What Does Freight Insurance Cover?
Most comprehensive freight insurance policies cover:
- Loss or theft of cargo
- Damage due to mishandling, collisions, or accidents
- Weather-related damage (floods, storms, etc.)
- Vandalism
- Spoilage (for reefer loads, if covered)
- Container or packaging-related damage
Always check the policy exclusions—some insurers may not cover improper packaging, acts of war, or certain hazardous materials unless specifically stated.
