Cargo Insurance for China Shipments: Coverage, Cost and Claims

A container falls overboard, a ship catches fire, or your cartons arrive crushed. Who pays? Not the shipping line, or at least not much. This guide explains how cargo insurance works when you ship from China, what it covers, how much cover you need, and how to make a claim.

Key points
• Carriers pay very little for lost or damaged cargo. Their liability is capped by international rules, often far below the value of your goods.
• Cargo insurance (also called marine cargo insurance or freight insurance) covers the value of your goods while they travel.
• The standard insured value is the CIF value plus 10%, so 110% of goods, freight and insurance.
• All-risks cover, Institute Cargo Clauses (A), is the widest. Clauses (C) only cover major disasters.
• Cargo insurance also protects you from general average, where you can be asked to pay for a ship’s emergency even if your goods are not damaged.

Why the Carrier’s Liability Is Not Enough

Many importers assume the shipping line or airline will pay if the goods are lost. In practice, carriers are only liable when they are at fault, and even then their payment is capped by international rules:

SDR (Special Drawing Rights) is a unit set by the IMF, worth a little over one US dollar. On a pallet of electronics, the carrier’s limit may cover only a small part of the real value. And for events such as storms, fire on board or general average, the carrier may not be liable at all.

What Cargo Insurance Covers

Most cargo policies are based on the Institute Cargo Clauses (ICC), written by the London insurance market. There are three levels:

For most manufactured goods from China, ICC (A) is the sensible choice. Handling damage and theft are among the most common claims, and only (A) covers them.

What Cargo Insurance Does Not Cover

Even all-risks cover has exclusions. The main ones are:

• Poor packing: damage caused by packing that is not strong enough for the journey.
• Inherent vice: damage from the nature of the goods, such as rust on unprotected steel or mould on goods packed wet.
• Delay: loss of market or late delivery, even if the delay was caused by an insured event.
• Wear and tear, and ordinary loss of weight or volume.
• Wilful misconduct by the insured.
• War and strikes, unless added with extra clauses, which is common for sea cargo.

Good export packing matters for the claim as much as for the cargo. See our packing and labelling service.

General Average: The Risk Most Importers Miss

General average is an old maritime rule that still applies today. If the crew sacrifice cargo or spend money to save the ship, for example by fighting a fire or hiring a salvage tug, every cargo owner on board shares the cost in proportion to the value of their goods. That includes owners whose goods arrived undamaged.

When general average is declared, cargo is not released until each owner provides security. With cargo insurance, the insurer provides a guarantee and your goods are released. Without it, you may have to pay a cash deposit, sometimes a large share of your cargo value, before you can collect your own goods.

How Much Cover Do You Need?

The standard insured value is CIF + 10%:

• the value of the goods (your commercial invoice),
• plus the freight,
• plus the insurance premium,
• plus 10% for extra costs such as duties already paid, re-ordering and profit.

Example: goods worth $40,000 with $3,000 freight have a CIF value of about $43,000, so the insured value is about $47,300.

The premium is a small percentage of the insured value. It depends on the goods, the route, the transport method, the packing and the level of cover, so it is quoted per shipment.

Who Buys Insurance Under Each Incoterm

Under CIF, the seller only has to buy basic cover for you. Read more in our guide to CIF meaning in shipping, or compare all terms in Incoterms 2020.

How to Make a Cargo Insurance Claim

1. Check the goods on delivery. Note any visible damage or missing cartons on the delivery receipt before you sign it.
2. Take photos of the container, seal, cartons and damaged goods. Keep the damaged goods and packaging.
3. Tell the insurer at once, and ask whether a surveyor will inspect the goods.
4. Notify the carrier in writing. For damage that is not visible on delivery, notice to a sea carrier is due within 3 days under the Hague-Visby Rules. This keeps your insurer’s right to recover from the carrier.
5. Send the documents: the insurance certificate, commercial invoice, packing list, bill of lading or air waybill, survey report, photos and your claim letter with the amount claimed.

Not sure which documents you have? See our guides to the bill of lading and the commercial invoice and packing list.

Institute Cargo Clauses A, B and C Compared

ICC (A) is often called “all risks”, but it still has exclusions, such as poor packing, delay, normal wear and inherent vice. For most manufactured goods from China, (A) is the sensible choice.

What Does Cargo Insurance Cost? An Example

Premiums are usually a small percentage of the insured value, with a minimum premium per shipment. The rate depends on the goods, the route, the packing and the cover. An example:

Compare that with the carrier’s liability for the same container, which can be a small fraction of the goods’ value, and with a general average guarantee, which can be demanded even if your own goods are undamaged.

Claim Example: Water Damage in a Container

1. On delivery: the warehouse opens the container and finds wet cartons at the door end. Staff take photos before unloading further and note “wet cartons” on the delivery receipt.
2. Same day: the importer tells the insurer and the forwarder in writing.
3. Within three days: written notice of loss is sent to the carrier, which is required for hidden damage under the usual sea transport rules.
4. Survey: the insurer appoints a surveyor to check the damage and the cause. The damaged goods are kept until the survey is done.
5. Claim file: the importer sends the policy or certificate, invoice, packing list, bill of lading, photos, survey report and a repair or replacement cost.
6. Settlement: the insurer pays the loss, less any deductible, and may then claim from the carrier.

Cargo Insurance with JIEYI

We can arrange cargo insurance through our insurance partners for sea, air, rail and express shipments from China. We quote the premium with your freight, so you see the full cost in one quote. The price depends on your goods, their value, the route and the level of cover.

Because we inspect and repack goods in our Guangdong warehouse, we can also help you meet the packing standards that insurers expect. If something does go wrong, we send you the shipping documents you need for the claim.

See our sea freight and air freight services.

FAQ

Is cargo insurance mandatory?

No, it is not required by law. But without it you rely on the carrier’s limited liability, and you may have to pay a general average deposit to release your goods.

How much does cargo insurance cost?

The premium is a small percentage of the insured value. It depends on the goods, route, transport method, packing and level of cover, so ask for a quote for each shipment.

What is the difference between cargo insurance and marine cargo insurance?

They usually mean the same thing. “Marine” cargo insurance often covers air and land transport too, not only sea freight.

Does cargo insurance cover delay?

No. Standard cargo policies exclude loss caused by delay, even when the delay comes from an insured event.

Do I need insurance if I buy CIF?

Under CIF the seller buys insurance for you, but only minimum cover, Institute Cargo Clauses (C), which does not cover theft or handling damage. Many buyers upgrade to (A).

Does cargo insurance cover LCL shipments?

Yes. Insurance covers your goods whether they ship in a full container, a shared container (LCL), by air or by express.

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Checked on 2 November 2026 against the Institute Cargo Clauses, the Hague-Visby Rules, US COGSA and the Montreal Convention. Policy terms vary, so always read the policy wording. Want insurance with your next shipment? Send us your goods value and route, and get a quote within 2 hours.