(Dry goods) What is the freight insurance we buy in international logistics! Why buy it! What's the use! Here is the best answer

In international cargo transportation, there are often risks of one kind or another. These risks can easily cause the loss of goods and are the most troublesome problem for cargo owners.

To avoid these risks from causing losses to your own cargo transportation, the best way is to purchase an international logistics freight insurance for the cargo.

Types of cargo transportation insurance and compensation standards

International cargo transportation insurance is an insurance that uses various goods in the course of foreign trade cargo transportation as the subject of insurance. There are many ways to transport foreign trade goods by sea, land, air and postal delivery. The types of international cargo transportation insurance are divided into four categories according to the types of transportation vehicles that are the subject of insurance: marine transportation cargo insurance, land transportation cargo insurance, air transportation cargo insurance, and postal package insurance.

International trade transportation insurance procedures. Sometimes two or more means of transportation are used in the whole process of a batch of goods. At this time, the main means of transportation in the whole process of freight is often used to determine which type of international trade transportation insurance is insured.

Regardless of the mode of transportation you choose, the traditional carrier's liability is limited, and it is usually calculated by weight.

Compensation standards of many freight forwarders:

In the course of transportation, if the goods are lost or deducted from customs, the compensation will be RMB40/KG. The non-refundable freight lost after the UPS has been delivered will be compensated according to the declared value (up to 100 USD/ticket).

Compensation is based on weight. Yes, you are not mistaken. As for the express company’s no more than 100USD/ticket, you can think of it as the overlord clause, but in fact this is a factual legal basis. Whether it is the Montreal Convention or the Hague Law, the carrier bears limited liability.

Although your transportation contract is protected by international laws, local regulations and some transportation rules, due to the existence of general exemption clauses, as a shipper, your actual compensation is still limited.

Types of insurance and scope of liability for cargo insurance

International Logistics Freight Insurance 1: Basic Insurance

Basic insurance includes three types of insurance, and the scope of liability is from small to large: Ping An Insurance, WPA Insurance, and All Risks.

1. Ping An Insurance (Free from Particular Average, abbreviated as F.P.A)

The coverage of Ping An Insurance includes all losses and expenses caused by maritime risks other than individual average damage caused by natural disasters. Specifically:

(1) Total loss or presumed total loss of the entire batch of goods caused by the following natural disasters:

Severe weather, thunder and lightning, tsunamis, earthquakes, floods, etc.

(2) All or part of the loss caused by the following reasons:

Run aground, hit a rock, sink, collide with each other, collide with flowing water or other objects, catch fire, explode, etc.

Rescue costs due to one piece or the whole piece of cargo falling into the sea during loading, unloading or transshipment.

Special expenses incurred in the port of refuge and the port of midway caused by unloading, storage, and delivery of goods.

General average sacrifice, push and rescue costs.

According to the provisions of the "Ship Collision Clause", the cargo party shall repay the ship's losses.

2. Water Accident Insurance (With Average, W.A. for short):

The coverage of water damage insurance includes all losses and expenses caused by marine risks. That is, on the basis of safety insurance, plus individual average damage caused by natural disasters.

3. All Risks:

The coverage of all risks includes all the liabilities of WPA, as well as losses caused by general external risks.

International logistics freight insurance 2: additional insurance (also can be divided into general additional insurance and special additional insurance)

1. General Addition Risk

General additional insurance is also called ordinary additional insurance, which covers cargo loss caused by general external reasons. The general additional insurance mainly includes theft, failure to pick up the goods, fresh water and rain insurance, short-term insurance, miscellaneous, contamination insurance, leakage insurance, and collision insurance. Risks such as damage, breakage, odor, damp and heat, hook damage, package breakage, rust damage, etc.

2. Special Addition Risk

Special additional risks are generally calculated independently and are not included in the scope of all risks. They specifically include eight types of insurance. They are: under-delivery insurance, import tariff insurance, deck insurance, rejection insurance, and aflatoxin insurance. , Exported goods to Hong Kong (including Kowloon) or Macau to store fire insurance liability extension clauses, as well as maritime cargo war insurance, strike insurance.

International logistics freight insurance three: exemption of liability

In the above insurance, corresponding exemptions are also attached, mainly including:

1. Losses caused by the insured’s deliberate actions or negligence.

2. Losses caused by the responsibility of the shipper.

3. The loss caused by the existing poor quality or short quantity of the insured goods before the start of the insurance liability.

4. Losses and expenses caused by natural wear and tear, essential defects, characteristics of the insured goods, market price drops, and transportation delays.

5. It belongs to the scope of liability and exclusions stipulated in the marine cargo war risk clause and the cargo transportation strike insurance clause.

Cargo insurance premium calculation


There are generally three prices for delivery at the port of shipment widely used in international trade: FOB price (free on board price, ie FOB price); cost plus freight price (ie CFR price); CIF price (including cost plus freight plus insurance) Fee, namely CIF price).

Generally speaking, insurance laws and international trade practices of various countries generally provide that the insurance amount of export cargo transportation insurance should be appropriately added based on the CIF price. The bonus rate is generally 10%, and different bonus rates can also be agreed with the insured. , But generally not more than 30%. Insurance amount = CIF price * (1 + markup rate).

If it is a CFR quotation, it should be converted into a CIF price, CIF=CFR/[1—(1+markup rate)*insurance rate]; if it is a FOB quotation, you need to add freight to the FOB price first, and become CFR Later, it is converted into CIF price.


The insurance amount is based on the CIF price of the imported goods. If you want to add insurance, you can add 10%. If imported under CFR or FOB terms, the insurance amount is directly calculated according to the special insurance rate and the average freight rate.

When importing according to CFR: insurance amount = CFR price * (1 + special insurance rate); when importing according to FOB: insurance amount = FOB price * (1 + average freight rate + special insurance rate).

The above is the explanation of some types of insurance and exemption of liability in international logistics and freight insurance, as well as the calculation of insurance premiums. I hope that it can be helpful to the cargo transportation of importers and exporters. If you want to successfully carry out cargo transportation, the best way is to buy an insurance for your cargo according to your actual situation.