Air Cargo Insurance: What It Is and What It Covers

In the powerful world of global commerce and trade, the transportation of goods by air is quite common because of its efficiency and speed. However, all this speed and efficiency comes with risks like loss, theft, and damage to cargo. To reduce these risks and threats, that is where air cargo insurance steps in.

Air Cargo Insurance: What It Is and What It Covers

Besides, a lot of business owners rely on this form of insurance to mitigate the risks and threats involved. Hence, whether you are a logistics professional, a business owner, or a freight forwarder, it is important that you understand air cargo insurance and its importance when it comes to offering peace of mind and safeguarding valuable shipments. Without further ado, let us dive into it.

What Is Air Cargo Insurance?

Air cargo insurance is a specialized form of insurance designed to protect goods and merchandise while in transit through air transportation. It offers coverage against different forms of risks, like destruction of cargo, loss, damage, or theft during the journey from the initial point to its final destination.

It gives policyholders the financial protection they need, whether it is for individual or business purposes. If you are shipping goods by air, importing, or exporting, air cargo insurance gives you the right amount of coverage and protection.

How Does It Work?

Air cargo insurance operates just like other forms of insurance. This means that individuals and business owners can get a quote from any insurance company of their choice.

When they do so, the policyholder will need to pay their premium based on factors like the value of the cargo, the level of coverage required, the mode of transportation, and the route.

However, if the cargo experiences an event that falls under the covered damage or loss during transit, they can file a claim with their insurance provider to get compensation for the losses, according to the terms and conditions of the insurance quote.

What Does Air Cargo Insurance Cover?

Here is what it typically covers:

  • Transit risks.
  • Losses
  • Fire
  • Damage
  • Explosions
  • Natural disasters.
  • Theft
  • Mishandling

These options differ among insurance companies as well. 

What Does It Not Cover?

Here are situations that it will not cover:

  • Improper packing.
  • War and terrorism.
  • Inherent default.
  • Unauthorized goods.
  • Loss or delay in the market.
  • Business interruptions.
  • Lost profits.

These coverage options vary by insurance provider as well. This is why it is crucial that you check the terms and conditions of a policy before purchasing.

Who Needs a Policy?

Individuals and businesses that are into transportation or moving goods through air freight typically need air cargo insurance. People in these industries need it as well.

  • Freight forwarders.
  • Suppliers and manufacturers.
  • Logistics companies.
  • Individual shippers.
  • Importers
  • Distributors
  • Retailers
  • Exporters

In summary, people who are interested in protecting their financial interests and are into air cargo transportation need an air cargo insurance policy.

How Much Does It Cost?

The price of purchasing an air cargo insurance policy is determined by different factors, which include the level of coverage, the value of the cargo, the insurance company, the mode of transportation, the deductible amount, and the route.

Generally, the premium amount for this insurance type is usually calculated as a portion of the declared value of the cargo.

How to Get Air Cargo Insurance

If you would like to purchase this insurance policy, here is what you need to do:

  • Evaluate your needs.
  • Research insurance companies.
  • Compare quotes.
  • Ask for policies.
  • Go through the terms and conditions of every policy.
  • Make inquiries.
  • Buy the policy.
  • Keep records of your cargo shipments and other documentation.
  • File claims immediately.
  • Review and renew your policy.

It is important that you review your insurance coverage and renew it before its expiration date to maintain endless coverage and protection.


What risks does air cargo insurance protect against?

Air cargo insurance usually offers protection against risks like pilferage, damage, loss, natural disasters, theft, rough handling, accidents, and other unpredictable events that may take place during the transportation of goods by air.

Who is responsible for purchasing air cargo coverage: the shipper or the carrier?

The responsibility for buying an air cargo insurance policy for protection usually falls on the owner of the goods or the shipper. Although the carrier’s liability coverage is limited, it is best for shippers to get air cargo coverage to get basic protection for their products.

Are there specific types of cargo that may require specialized insurance coverage?

Yes, specific high-value products that are unique, hazardous, or perishable might need specified insurance coverage customized to their risks and characteristics. For instance, perishable foods, pharmaceuticals, hazardous materials, electronics, and fine art.

What steps should I take if my cargo is damaged or lost during transit?

If your cargo or shipment is lost or damaged during transit, you should contact the carrier or airline immediately, document the loss or damage with written records and photographs, and lastly, file a claim with your insurance company. Your insurance provider will help you with the claim process and evaluate your compensation eligibility.

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