Cargo insurance for Dubai shipments

Carrier liability is not insurance

This is the most expensive misunderstanding in freight. Carriers carry a limited liability set by international convention, and that liability is calculated by weight, not by what the cargo is worth. It is also defensible: the carrier can decline where the loss falls within the exclusions available to it.

The practical effect is that a light, valuable consignment is barely protected at all. A pallet of electronics and a pallet of tiles of the same weight attract the same liability limit, which for the electronics may be a small fraction of the invoice value. The gap between that limit and the value of the goods sits with the cargo owner unless it is insured.

Cargo insurance covers the goods on their stated value rather than their weight, which is why it is worth raising at quote stage rather than after a loss has already happened.

What cover can be arranged

Cover can be arranged for eligible air, sea and road shipments, subject to insurer terms, the declared value and acceptance of the commodity. Terms, scope and exclusions are set by the insurer and confirmed before the shipment moves, not assumed.

Cover is normally arranged for the door-to-door journey where that is the scope of the movement, including the road legs and any storage in transit, rather than only the main carriage. A policy that ends at the port leaves the last leg — statistically a common point of damage — uncovered.

Needed to arrange cover:

• Commercial invoice value of the goods, and the currency
• Full commodity description — cover depends on what the cargo actually is
• Mode, route, origin and destination, including any inland legs
• Packing method and whether the cargo is containerised
• Any storage expected in transit
• Whether the cargo is new or used, as this affects acceptance

Declaring the right value

The declared value is what the settlement is measured against, so under-declaring to reduce a premium reduces the payout by the same logic. Cover is normally arranged on the commercial invoice value, often with freight and an allowance added to reflect what replacing the consignment would actually cost.

Used, refurbished and second-hand goods are treated differently from new goods, and some commodities are excluded or accepted only on restricted terms. Describing the cargo accurately is what makes a claim straightforward; a description that does not match the goods is what makes it contested.

If something goes wrong

The steps taken in the first hours after a loss usually decide how the claim goes. Damage should be noted on the delivery receipt at the point of receipt rather than signed for clean and reported later, and the cargo should be photographed before it is moved or unpacked further.

The carrier has to be notified within the time limits that apply to the mode, and those limits are short. The packing list, the inventory and the transport document are the reference points for what was shipped and in what condition, which is another reason to get them right at the outset.

Because we hold the shipment file — the booking, the documents and the delivery record — we can support the notification and the claim rather than leaving the cargo owner to assemble the history afterwards.

Frequently asked questions