How to Value Cargo for Insurance
Calculate the insured value by taking the FOB value, adding the ocean or air freight, add 10% of that total.
Thus, a shipment valued at $10,000.00 with $2,000.00 freight cost, would have an insured value of $13,200.00.
You can frequently arrange higher buffer amounts upon request.

Types of Coverage
The definitions of coverage below are general descriptions and may not be applicable to all shipments. Please Contact your
Insurance Provider for specific information on your shipment.

All Risk
This will cover merchandise for most types of perils that it may encounter. This coverage is intended for “approved” or
“general” merchandise—that which is new, export packed and not unusually susceptible to losses from breakage, theft,
pilferage, scratching and the like. All Risk coverage will insure against “…physical loss or damage from any external cause…”
but specifically excludes the following:

• Improper packing
• Abandonment of cargo
• Rejection by Customs, FDA or other Government agency
• Failure to pay or collect accounts
• Inherent vice (spoilage, infestation, failure of product to perform intended functions)
• Loss caused by delay
• Loss of use and/or market
• Nuclear
• Losses exceeding cargo policy limit
• Losses at port city more than fifteen days after discharge
• Losses inland more than thirty days after discharge
• Losses in South America after sixty days
• Oceangoing barge movements (unless specifically endorsed)
• Goods subject to an On-Deck bill of lading
• Loss caused by temperature of pressure (air freight only)
• Failure to notify air carrier of preliminary loss

F.P.A. (Free of Particular Average)
In insurance terms, this means “free from partial loss,” meaning that the insurance company is free from partial loss.
Refer to F.P.A. as Total Loss Only because in order to recover anything under an F.P.A. policy, the customer usually must
suffer a total loss of the goods. F.P.A. will cover perils of the sea, such as stranding, sinking burning, or collision of the vessel.
It will also cover land perils that are generally out of man’s control. Write F.P.A. coverage for used merchandise, waste such
as scrap metal or waste paper and merchandise stowed on deck or as bulk cargo.

W.A. (With Average)
With Average coverage is basically F.P.A. that is extended to provide for protection from damage caused by exceptionally
heavy weather. Both F.P.A. and W.A. can usually be extended to include theft, pilferage and non-delivery of an entire
shipping package.

War Risk
“Marine” insurance (this also includes air insurance) always carries a companion policy covering war risks such as hostile
actions and leftover mines. This insurance carries additional premium that is usually two to three cents per $100 of insured
value. However, war rates for countries such as Iran and Lebanon are noticeably higher, for obvious reason.

Duty Insurance
Duty and I. R. Tax do not accrue for goods that are totally lost in transit, but partially damaged goods are frequently dutiable
at full value. Depending on the duty rate, insuring the anticipated duty amount may be prudent. Duty coverage is usually
about one-third of the cargo insurance rate; I. R. Tax coverage is somewhat higher. Both require companion war coverage
that is usually about half the regular war coverage.

Tables of Coverage
The following tables may help as a quick reference. Please Contact us to discuss your particular shipment requirements.

Goods on Shore
F.P.A. W.A. All Risk, Collision, Collapse of dock, Cyclone, Derailment, Earthquake, Fire, Flood, Hurricane, Lightning, Fresh water,
Grease, Hook damage, Leakage, Mud, Non-delivery, Pilferage, Sling loss, Theft

Goods on Board Vessel
F.P.A. W.A. All Risk, Burning, Collision, Sinking, Stranding, Heavy weather, Contact us with other cargo, Grease, Hook damage,
Improper stowage, Leakage, Mud, Non-delivery, Pilferage, Ship sweat, Sling loss, Steam, Theft, General Average.

What is General Average?
General Average means, literally, general loss. It can be voluntary, such as when the master jettisons containers for the
safety of the vessel. It can be involuntary, such as a collision involving another ship. When a General Average loss occurs,
each party involved participates in the loss.

General Average originated in the days of Marco Polo’s spice trains. Marco Polo put together large groups of individuals with
camels who would foray into China and other countries, trading for spices and other goods. If, during their trip, they were
attacked and one trader lost his camel or his goods, the others in the train would chip in and replace his losses. This noble
thought survives in current transportation law so that when a vessel runs aground, incurring substantial damage to the
vessel, all of the firms having cargo on board the vessel help to pay for the repairs.

General Average liability is the first reason for purchasing cargo insurance. All types of insurance cover General Average.

Why Buy Cargo Insurance?
Many importers purchase their goods on a C.I.F. (Cost, Insurance and Freight) basis because they find it convenient.
Unfortunately, you are not evaluating the price they pay for this convenience. Frequently, the insurance is no bargain and in
many cases it is worthless.

Filing Claims
When you buy C.I.F. and you have damage, you must file and try to settle claims under the terms of the foreign insurer.
First and foremost, this means that your claim must be settled under foreign law and under foreign insurance terms and
conditions. They are different from those with which you are familiar in the United States.

The claims procedure itself is daunting. Normally, you must Contact us the claims adjuster listed on the reverse of your
policy. The adjuster will survey your goods and write up an estimate. You will have to pay the adjuster for the
services-at least several hundred dollars—and add this to the amount of your claim. Then, you must send the claim to the
foreign insurer and hope that they pay you.

Know Your Insurer
It is rather frightening to be sending a claim to a foreign insurer about whom you know nothing and who may not be inclined
to pay you. Settling disputes in international matters is difficult and time consuming and can be expensive. 

What To Do When You Have Damage

1. Take exceptions on the delivery receipt that the trucker asks you to sign. If there is visible damage to cartons, crates or
the container, Contact us if your arranged insurance through us. Otherwise, call the claims adjuster shown on your policy.

2. File a written notice of intent to file a claim with the importing carrier within your allotted time.
For air shipments, this is only seven days. For ocean shipments, the limit is one year. It is best to do so immediately.

3. Contact us the claims adjuster to arrange for a survey of the cargo and a damage estimate. Cooperate with the adjuster
fully, as it will affect your ability to collect reimbursement.

4. Once the adjuster completes the survey, file the claim for damages with the insurer promptly.