Common Cargo Insurance Myths - Busted!

• Myth 1: "Carrier Liability Fully Covers Your Goods" 

• Myth 2: "All Policies Are Identical or ‘All-Risk’ Means Everything’s Covered" 

• Myth 3: "Cargo Insurance Is Too Expensive; Not Worth It" 

• Myth 4: "Insurance Covers Every Loss Including Delays and Market Value Loss" 

• Myth 5: "Good Packaging Means Insurance Is Unnecessary" 

• Myth 6: "Claiming Is Too Difficult; Claims Rarely Get Settled" 

• Summary Table: Myths vs. Reality 

• Why Knowing the Truth Matters 

• How BTW IMF Protects You from These Myths 

• Final Thought 

Navigating cargo insurance can be confusing because of many misconceptions. This guide clears up the common cargo insurance myths, helping you make smart, informed choices.

Myth 1: "Carrier Liability Fully Covers Your Goods" 

Reality: Carriers have strict liability limits. These limits are often based on weight or package size, not the shipment’s value. 

In contrast, cargo insurance covers the actual declared value. It protects against losses due to theft, weather, or mishandling risks that carriers are not fully responsible for.

Myth 2: "All Policies Are Identical or ‘All-Risk’ Means Everything’s Covered" 

Reality: Insurance plans vary significantly. "All-risk" does not literally mean “everything.” Common exclusions include inherent vice, delays, war risks, and poor packing. 

Understanding whether you have All-Risk or Named Perils is crucial to avoid unexpected gaps in coverage.

Myth 3: "Cargo Insurance Is Too Expensive; Not Worth It" 

Reality: Typical premiums range from 0.3% to 0.5% of the declared cargo value. This cost is small compared to the potential losses from theft or damage. 

Even smaller or low-value shipments can face significant risks and losses if left uninsured.

Myth 4: "Insurance Covers Every Loss Including Delays and Market Value Loss" 

Reality: Standard cargo insurance covers physical loss or damage, not financial losses like delays or market fluctuations, unless you have specific endorsements. 

Some policies may provide limited coverage for perishables during delays, but only if explicitly included.

Myth 5: "Good Packaging Means Insurance Is Unnecessary" 

Reality: Proper packaging is important, but it cannot eliminate all risks. Issues like piracy, extreme weather, theft, or transit accidents can still occur, even with good packaging. 

Insurance remains the best protection against uncertainties beyond your control.

Myth 6: "Claiming Is Too Difficult; Claims Rarely Get Settled"   

Reality: With the right documentation and a reliable insurer, cargo claims are usually honored fairly. Modern insurers and digital platforms have made claims processes much easier.

Summary Table: Myths vs. Reality 

Myth	Reality
Carrier covers any damage	Carrier liability is limited and often insufficient
All policies offer full protection	Coverage varies exclusions apply even under All-Risk plans
Insurance is too expensive	Premiums are minimal relative to cargo value
Insurance covers delays and market loss	Only physical damage is covered unless extensions are purchased
Security alone protects goods	Packaging helps, but many risks are beyond your control
Filing claims is a hassle	Well-documented claims are efficiently processed with modern insurers

Why Knowing the Truth Matters 

• Avoid underinsurance by recognizing how policy limitations can affect outcomes. 

• Choose the right endorsements, like war-risk, delay, or SRCC, based on your supply chain risks. 

• Work with qualified insurers or brokers who can clarify coverage, assist with documentation, and support claims effectively.

How BTW IMF Protects You from These Myths 

At BTW IMF, we provide clients with clear, detailed cargo insurance. 

• We clarify coverage differences between All-Risk and Named Perils and outline exclusions from the start. 

• Our advisors help you choose endorsements based on your cargo type and route risks. 

• We simplify claims documentation and support to ensure businesses do not miss out due to process gaps.

Final Thought 

Cargo insurance protects more than just physical loss it safeguards your business continuity. By understanding and addressing common myths, you ensure your coverage is both complete and suited to your logistics risks. 

Don’t let common cargo insurance myths cost you contact BTW IMF today for clarity and cover.