QUICK ANSWER Cargo insurance is not legally required to import, but for most shipments you need it, because the ocean carrier's own liability is capped at just $500 per package under COGSA, far below the value of a real container. If your goods are worth more than that cap, an uninsured loss at sea is your loss to absorb.
Do you need cargo insurance? Almost always, and the reason is a number most importers never see until a claim: $500 per package. That is all the ocean carrier owes you if your container is damaged or lost, no matter what the goods were worth. This guide explains the gap and how to close it.
Is cargo insurance required
No US law forces an importer to insure ocean or air cargo. It is a business decision, not a permit. But "not required" is not the same as "not needed": the moment your goods leave the supplier under a term like FOB, nobody is obligated to insure them, and the carrier's own liability is a fraction of their value. For any shipment worth protecting, that makes cargo insurance the default, not the exception.
The COGSA $500-per-package limit
The Carriage of Goods by Sea Act caps an ocean carrier's liability at $500 per package unless a higher value is declared and paid for. "Package" often means the shipping unit on the bill of lading, so a full container declared as a handful of packages can carry a liability ceiling in the low thousands of dollars against cargo worth far more.
KEY TAKEAWAY A container of goods worth $60,000 declared as, say, ten packages caps the carrier's liability at roughly $5,000 under COGSA. The other $55,000 is uninsured unless you bought your own cargo policy. That gap, not the premium, is the real cost of skipping insurance.
What cargo insurance covers and excludes
A marine cargo policy covers physical loss or damage to the goods in transit. What it pays on depends on the level of cover you buy, and every policy carries standard exclusions.
Cargo insurance, typically covered vs excluded
| Typically covered | Typically excluded |
|---|---|
| Physical damage in transit | Inherent vice (goods that spoil on their own) |
| Total or partial loss of the shipment | Insufficient or improper packing by the shipper |
| General average contributions | Ordinary wear and delay |
| Theft and non-delivery (on wider cover) | Losses from unseaworthiness the insured knew of |
The types of cargo insurance
Ocean cargo cover comes in three standard levels, the Institute Cargo Clauses. The difference is how much they cover.
The three levels of cargo cover
| Level | Cover | In plain terms |
|---|---|---|
| ICC (A) | All-risk | Broadest, covers all risks except the named exclusions |
| ICC (B) | Named perils, wider | A defined list of events, more than (C) |
| ICC (C) | Named perils, minimum | The shortest list, thinnest cover |
This matters when you buy on CIF, where the seller is only required to provide minimum ICC (C). For your own cover, all-risk ICC (A) is what actually protects a container.
How much cargo insurance costs
A marine cargo premium is a small percentage of the insured value, typically a fraction of one percent for general merchandise, with the exact rate depending on the goods, the lane, and the packing. Against the value it protects, and against the carrier's $500-per-package cap, the premium is one of the cheapest lines in a shipment. The point is to price it into your landed cost from the start, not to discover the gap after a loss.
Carrier liability vs cargo insurance
These get confused constantly. Carrier liability is what the carrier owes you by law when it is at fault, and it is capped and hard to collect. Cargo insurance is a policy on the goods themselves that pays you regardless of fault, up to the declared value.
Carrier liability vs cargo insurance
| Carrier liability | Cargo insurance | |
|---|---|---|
| What it is | The carrier's legal minimum | A policy on your goods |
| Amount | $500 per package (COGSA) | Declared value of the cargo |
| Pays when | Only if the carrier is at fault | Physical loss or damage, per the cover |
| Who arranges it | Built into the bill of lading | You, or your forwarder |
Does your Incoterm already cover it
Only two Incoterms make anyone insure the goods: CIF and CIP. Under CIF the seller buys minimum ICC (C), which is thin. Under CIP the seller must buy all-risk ICC (A). On every other term, including FOB, insurance exists only if you arrange it. So unless you bought CIP, assume the shipment is uninsured until you say otherwise. How each term handles insurance is in our Incoterms 2020 guide.
How Platton helps you insure a shipment
The point of insurance is that it is arranged before the loss, on the right cover, at the declared value. Platton builds it into the shipment for US importers.
All-risk cover on declared value
We arrange cargo insurance at ICC (A) all-risk level on the real value of the goods, the cover that actually pays out on a mid-transit loss, not the carrier's $500-per-package minimum.
Priced into the quote, not bolted on later
The premium sits on the same itemized quote as the freight and duty, so it is in your landed cost from the start instead of a gap you find after a claim.
The CIF insurance gap closed
When you buy on CIF and inherit thin ICC (C) cover, we flag it and quote the top-up, so a supplier's minimum policy is not all that stands between you and a total loss.
One team on the claim
Because the shipment runs on one file, a loss has one owner coordinating the claim and the documentation, on the China to USA lane and beyond.
Get a shipment quote with cargo insurance included
Common Questions About Cargo Insurance
Is cargo insurance required to import?
No, US law does not require it. But under most Incoterms, including FOB, nobody is obligated to insure the goods, and the ocean carrier's own liability is capped at $500 per package under COGSA. For any shipment worth more than that cap, cargo insurance is the practical default, because an uninsured loss falls entirely on you.
Why do I need cargo insurance if the carrier is already liable?
Because the carrier's liability is tiny and conditional. COGSA caps it at $500 per package, and you only collect if the carrier is proven at fault, which is slow and often unsuccessful. A full container can be worth many times that cap. Cargo insurance pays on the declared value regardless of fault, which is the protection carrier liability does not give.
What does cargo insurance cover and exclude?
A marine policy covers physical loss or damage to the goods in transit, with the breadth depending on the level bought. Standard exclusions include inherent vice, improper packing by the shipper, ordinary wear, and delay. All-risk ICC (A) cover is the broadest; the minimum ICC (C) covers only a short list of named events, which is why the level you buy matters as much as having a policy.
What are the types of cargo insurance?
Ocean cargo cover comes in three standard levels, the Institute Cargo Clauses. ICC (A) is all-risk, the broadest. ICC (B) covers a wider list of named perils. ICC (C) is the minimum, the shortest list and thinnest cover. For your own protection on a container, all-risk ICC (A) is the level that actually pays out on most real-world losses.
How much does cargo insurance cost?
A marine cargo premium is usually a fraction of one percent of the insured value, varying by the goods, the lane, and the packing. Against the value it protects and the carrier's $500-per-package cap, it is one of the cheapest lines in a shipment. Build it into your landed cost from the start rather than treating it as optional.
Does my Incoterm already include insurance?
Only if you bought CIF or CIP. Under CIF the seller provides minimum ICC (C), which is thin cover. Under CIP the seller must provide all-risk ICC (A). On every other term, including FOB, the goods are uninsured unless you arrange it yourself. So unless your contract is CIP, treat the shipment as uninsured until you have bought your own cover.
Related Freight Forwarding Guides
Incoterms 2020 explained: which terms include insurance, and at what level.
CIF Incoterm explained: why the seller's CIF insurance is thin.
Landed cost: where the premium fits in your per-unit cost.
