All-risk cargo insurance is a comprehensive coverage that protects goods in transit against a wide range of potential risks. Unlike more limited insurance options, all-risk policies offer broad protection against loss or damage from virtually any external cause, except those explicitly excluded in the policy.
Typical covered risks may include:
- Theft
- Accidents during transit
- Natural disasters
- Damage or loss due to handling or improper storage
While the term “all-risk” suggests complete coverage, it’s important to note that not all risks are included. Common exclusions may involve war, acts of terrorism, improper packaging, or inherent defects in the goods. Therefore, it’s essential to review the policy’s terms and conditions carefully to fully understand what is—and isn’t—covered.
Exclusions matter just as much as the list of covered risks.
Depending on the policy, common exclusions may include:
Inadequate Packing
A policy may exclude damage caused by insufficient or unsuitable packing or preparation of the cargo.
Inherent Vice
This refers to loss or deterioration caused by the natural characteristics of the goods rather than an external event.
Ordinary Wear, Leakage or Loss
Normal wear and tear or ordinary loss in weight or volume may fall outside the coverage.
Delay
Financial losses that result only from delayed delivery commonly fall outside standard cargo coverage.
War and Strikes
Standard coverage may exclude some war, strike, riot, or related risks. Separate clauses or extensions may apply depending on the policy.
Other exclusions can also apply. Always review the exclusions in the actual insurance contract rather than relying on a general list.
The main difference lies in how each policy defines covered events.
| All-Risk Coverage | Named-Perils Coverage | |
|---|---|---|
| Coverage basis | Broad coverage subject to exclusions | Covers specifically listed risks |
| Physical loss or damage | May apply unless excluded | Must result from a covered peril |
| Exclusions | Important for defining the limits of coverage | Policy focuses on the listed covered events |
| Scope | Generally broader | Generally narrower |
For example, a named-perils policy may identify specific events such as fire, collision, or vessel grounding. If an event does not appear among the covered perils, the policy may not respond to the loss.
All-risk coverage takes a broader approach, but its exclusions still determine the actual scope of protection.
Cargo insurance and carrier liability are not the same thing.
Carrier liability refers to a carrier’s legal responsibility for cargo loss or damage under the applicable contract and rules. However, cargo insurance protects the shipment according to the terms of the insurance policy.
A carrier’s responsibility for the goods does not provide the same protection as cargo insurance.
For a broader look at insurance types, risks, and claims, see our freight insurance guide.
Before arranging cargo insurance, check the following:
- Insured cargo and value
- Origin and destination
- Start and end points of coverage
- Policy exclusions
- Deductible, if applicable
- Packing requirements
- Special conditions for the commodity
- Additional clauses or extensions
The policy wording should always take priority over general descriptions of “all-risk” insurance.
Does all-risk cargo insurance cover everything?
No. All-risk cargo insurance provides broad protection, but exclusions and policy conditions still apply. It does not cover every possible type of loss or damage.
Does all-risk insurance cover cargo damage?
It may cover accidental physical loss or damage during transit, depending on the cause and the policy terms. Always check the exclusions and conditions for your shipment.
Is all-risk coverage the same as cargo insurance?
No. All-risk coverage is one form of cargo insurance. Other policies may cover only specific risks or named events.
Need Cargo Insurance for Your Shipment?
The right insurance option depends on your cargo, shipment value, route, and required protection.
Review ASLG’s cargo insurance options for your shipment.
