Types of logistics insurance fall into two main groups: cargo (transit) insurance, which protects the goods themselves, and liability insurance, which protects the legal liability of the carrier, forwarder or warehouse keeper. The main ones are cargo, CMR, forwarder liability, warehouse, project cargo, DSU/ALOP, valuable cargo and compulsory dangerous goods liability insurance.
Property insurance or liability insurance?
The first question in choosing insurance in logistics is "what am I protecting?" Property insurance insures the goods themselves; when damage occurs, the loss within the scope of cover is paid on the basis of the sum insured, regardless of who was at fault. Liability insurance, on the other hand, covers the compensation the carrier, organiser or warehouse keeper has to pay the cargo owner; payment depends on the insured being legally liable and on statutory limits. The two groups do not replace each other; they complement each other.
The main types and who needs them
| Type of insurance | What does it protect? | Who takes it out? |
|---|---|---|
| Cargo (transit) insurance | Loss of and damage to the cargo during transport | The seller or buyer bearing the risk under the Incoterms |
| CMR insurance | The international road carrier's liability under the CMR | Carrier |
| Forwarder liability insurance | The organiser's errors, omissions and contractual liability | Forwarder, freight forwarding organiser |
| Warehouse insurance | Stock in the warehouse and the warehouse keeper's custody liability | Goods owner or warehouse operator |
| Project cargo insurance | Transport of heavy, out-of-gauge equipment from manufacture to installation | Project owner or EPC contractor |
| DSU/ALOP | Loss of revenue and financing costs caused by a delayed project start due to cargo damage | Project owner |
| Valuable cargo insurance | Works of art, precious metals, high-value electronics | Goods owner |
| Compulsory dangerous goods liability | Bodily injury and property damage caused to third parties by dangerous goods | Those carrying out professional activities with dangerous goods |
Key features of each type
Cargo insurance
Used in road, sea, air and multimodal transport. The level of cover is defined by the Institute Cargo Clauses (A), (B) or (C); (A) means "all risks". For details, see the entry on cargo transit insurance.
CMR and forwarder liability insurance
CMR insurance limits compensation to 8.33 SDR per kilogram of gross weight. Forwarder liability insurance, by contrast, covers the organiser's errors such as issuing incorrect documents, shipping to the wrong address or negligence in selecting a subcontracted carrier. The differences in scope are in the entry on forwarder liability insurance.
Project cargo and DSU
In energy and industrial projects, damage to a single piece of equipment can cause months of delay. The project cargo policy covers the physical damage, and DSU/ALOP cover the financial consequences of this delay. DSU is generally taken out in addition to the project cargo policy and from the same insurer.
Compulsory dangerous goods liability insurance
In Türkiye, it is mandatory under Council of Ministers Decision No. 2010/190 for those carrying out professional activities with dangerous goods. It covers third-party losses within the policy limits, regardless of fault. It does not insure the cargo itself.
Which party should look at which insurance?
- Exporter and importer: Cargo insurance according to the point at which risk passes; if the sale is CIF or CIP, the seller takes it out.
- Carrier: CMR insurance; if it carries dangerous goods, compulsory liability insurance.
- Forwarder and organiser: Forwarder liability insurance.
- Project owner: Project cargo and DSU.
For a frequently asked point of confusion, see the entry on the difference between CMR insurance and cargo insurance.
Common mistakes
- Mistaking the carrier's CMR policy for insurance of the cargo.
- Starting the cargo policy after the moment risk passes and leaving the period in between uncovered.
- Not noticing that crane operations during loading and unloading are excluded from the policy.
How does Voltim Global help with this?
For logistics insurance and project cargo insurance, Voltim Global works out which policies are needed according to the shipment's mode of transport, delivery term and cargo value. If there is a gap left uncovered between liability and cargo cover, the cargo owner is notified of it in writing before the shipment starts.
Frequently Asked Questions
Is it necessary to take out both CMR insurance and cargo insurance?
Are goods waiting in a warehouse protected by transport insurance?
Sources
- TSB – Tehlikeli Maddeler ve Tehlikeli Atık Zorunlu Mali Sorumluluk Sigortası Genel Şartları (General Conditions of Compulsory Liability Insurance for Dangerous Substances and Hazardous Waste)
- TOBB – Emtia Nakliyat Sigortası Genel Şartları (General Conditions of Cargo Transit Insurance)
- UNECE – CMR Convention