Cargo insurance
Cargo insurance for your imports
When cargo is lost or damaged, the carrier pays only a small part of its value, and sometimes nothing. Cargo insurance pays the insured value under the policy terms. Allied arranges the cover through our insurance partners.
- Ocean carrier limit
- $500 per package
- COGSA, unless you declare a higher value
- Air carrier limit
- 26 SDR per kg
- Montreal Convention, since December 28, 2024
- Who insures
- Our insurance partners
- Allied is not an insurer
- Price
- Quote on request
Why is the carrier's liability not enough?
| Mode | Rule | Limit | Deadlines |
|---|---|---|---|
| Ocean | Carriage of Goods by Sea Act (COGSA), 46 U.S.C. 30701 note, section 4(5) | $500 per package, or per customary freight unit for goods not in packages. A higher value applies only if you declare it before shipment and the bill of lading shows it. | Written notice at delivery, or within 3 days if the damage is not apparent. Suit within 1 year of delivery. |
| Air | Montreal Convention 1999, Article 22(3) | 26 SDR per kilogram since December 28, 2024. ICAO put this at about US$35 per kilogram. A higher value applies only with a special declaration and any extra charge. | Complaint within 14 days of receipt for damage, 21 days for delay (Article 31). Suit within 2 years (Article 35). |
| U.S. truck | Carmack Amendment, 49 U.S.C. 14706 | Actual loss, but a carrier can limit its liability in its rates to a value that you declare or agree in writing. | The carrier cannot require a claim in less than 9 months, or a suit in less than 2 years from its written denial. |
The ocean carrier also has defenses under COGSA section 4(2). It is not liable for loss from errors in the navigation or management of the ship, or from fire without its fault. Perils of the sea, acts of God and other listed causes also excuse it.
Example: ocean
A pallet of machinery worth $80,000 goes by ocean. The bill of lading shows 1 package and no declared value. If the pallet is lost, the carrier's limit can be $500.
Example: air
A 200 kg air shipment of electronics is worth $60,000. The carrier's limit is 5,200 SDR, about $7,000 at the ICAO 2024 figure.
What is the difference between all-risk and named-perils cover?
| Cover | What it covers | Use |
|---|---|---|
| All risks: Institute Cargo Clauses (A) | All risks of loss of or damage to the goods, except the listed exclusions. | Most manufactured goods. The minimum cover under the Incoterms 2020 CIP rule. |
| Named perils: Institute Cargo Clauses (B) | Only listed events. For example fire or explosion, sinking or stranding, collision, earthquake or lightning, water entering the container, and a package lost overboard or dropped in loading. | Narrower cover. It pays only when a listed event caused the loss. |
| Named perils: Institute Cargo Clauses (C) | The shortest list. For example fire or explosion, sinking or stranding, collision, overturning of a truck, and jettison. | The minimum cover under the Incoterms 2020 CIF rule. |
Theft and rough handling are not on the (B) or (C) lists. Only clauses (A) cover them, subject to the exclusions. All three cover your share of general average and salvage charges.
What all three exclude
- Insufficient or unsuitable packing, including stowage in a container, if the packing was done by you or before the cover started
- Inherent vice: the nature of the goods, for example spoilage
- Delay, even when an insured risk caused the delay
- Ordinary leakage, ordinary loss in weight or volume, and ordinary wear and tear
- Willful misconduct of the insured
- War and strikes, unless the policy adds the war and strikes clauses
What is general average, and why does insurance speed up release?
Each cargo owner pays in proportion to the value of its goods that were saved. You pay even if your goods had no damage. Most bills of lading apply the York-Antwerp Rules.
The shipowner declares general average and appoints an average adjuster. Maritime law in most countries gives the shipowner a lien on the cargo. The carrier can hold your goods until you give security. The final adjustment can take a long time after the voyage ends.
| Security | Insured cargo | Uninsured cargo |
|---|---|---|
| General average bond | You sign it. | You sign it. |
| Second security | A general average guarantee from your insurer, in place of a cash deposit. | A cash deposit that the average adjuster sets, usually a percentage of the invoice value. |
| Who handles the general average | The insurer, through its claims process. | You, until the final adjustment. The adjuster refunds any excess deposit. |
Insured cargo is released faster
With insurance, you sign the bond and the insurer gives the guarantee. Without insurance, you must also pay the cash deposit before the adjuster clears your goods for release. If salvors helped the ship, they can ask for separate security.
How does a cargo claim work?
- You
Note the damage on the delivery receipt
Write the exceptions on the delivery receipt before you sign. Take photos of the goods, the packing and the container seal.
- You
Give the carrier written notice
Hold the carrier responsible in writing. By ocean, at delivery or within 3 days if the damage is not apparent. By air, within 14 days of receipt.
- You
Tell us and keep the goods
Do not throw away damaged goods or packing. The insurer can send a surveyor to inspect them.
- Allied
Send the claim file to the insurer
We send the insurance certificate, commercial invoice, packing list and bill of lading or air waybill. We add the delivery receipt, photos, survey report, repair estimate and the notice to the carrier.
- Allied
Follow the claim to a decision
The insurer decides the claim and pays the covered loss, less any deductible, under the policy terms. It can then recover from the carrier.
What does Allied do, and what does the insurer do?
Allied
We collect your shipment details, ask our insurance partners for a quote, arrange the cover before the goods ship and issue the insurance certificate. After a loss, we help you put the claim file together.The insurer
It issues the policy, sets the premium and the terms, and decides and pays claims.
Request: Cargo insurance
Quote on request
Cargo insurance: common questions
Is Allied an insurer?
No. Allied arranges the cover and issues the insurance certificate through our insurance partners. The insurer issues the policy, sets the premium and the terms, and decides and pays claims.
My supplier sells CIF. Am I insured?
Partly. Under the Incoterms 2020 CIF rule, the seller must buy only Institute Cargo Clauses (C) cover, unless the contract says more. The cover must be at least 110% of the contract price. Under CIP, the minimum is clauses (A). Check the certificate: the clauses, the insured value and where claims are paid.
Can I declare a higher value to the carrier instead?
Yes. COGSA and the Montreal Convention let you declare a higher value before shipment. Carriers can charge more for it. It still leaves the carrier's defenses in place, for example perils of the sea.
What is an SDR?
A Special Drawing Right, a unit that the International Monetary Fund publishes. Its dollar value changes each day. ICAO put the 2024 air cargo limit of 26 SDR at about US$35 per kilogram.
Does cargo insurance cover delay?
The standard Institute Cargo Clauses exclude loss caused by delay, even when an insured risk caused the delay. Plan storage and market risks separately.
Does damage in transit change the duty?
It can. CBP appraises partially damaged goods in their condition at import, with an allowance for the damage (19 CFR 158.12). Some goods get no allowance, for example rust on iron or steel. Tell us about damage before we file the entry.
Is a customs bond the same as cargo insurance?
No. A customs bond guarantees your payments and obligations to CBP. It pays nothing for lost or damaged cargo.
Insure your next shipment
Call (908) 291-8001 or email info@alliedchb.com
Last reviewed September 26, 2026. This page explains customs rules in general terms. It is not legal advice. Duty rates and CBP procedures change often, and we confirm the figures for your shipment in writing before you commit.