Marine cargo insurance is the cargo insurance that covers damage, loss and expenses that goods carried by ship may suffer during the voyage. The carrier's legal liability is limited to 666.67 SDR per package or 2 SDR per kilogram, and in some cases, such as fire, it does not arise at all. That is why the real value of the cargo is often protected only by this insurance.
What does marine cargo insurance cover?
The policy insures the cargo, that is, the goods being shipped; not the ship or the carrier's liability. The cover is mostly defined by the Institute Cargo Clauses (ICC) of the London insurance market. There are three basic options:
- ICC (A): Covers all damage and loss other than the exclusions; known as "all risks".
- ICC (B): Covers named risks; these include fire, sinking, collision, earthquake, entry of seawater and total loss of a package dropped overboard during loading or unloading.
- ICC (C): The narrowest cover; limited to major casualties such as fire, explosion, stranding, sinking, collision and jettison.
General average contributions and salvage charges are covered under all three clauses. War and strikes risks are added by separate clauses. The cover and exclusion lists of the three clauses are compared side by side in the ICC (A), (B), (C) clauses entry.
Why is the carrier's liability not enough?
Article 1186 of the Turkish Commercial Code (Türk Ticaret Kanunu, TTK) applies the same limits as the Hague-Visby Rules: the carrier is not liable for loss exceeding 666.67 Special Drawing Rights (SDR) per package or unit, or 2 SDR per kilogram of gross weight, whichever is higher. This limit does not apply if the nature and value of the goods were declared before loading and entered in the bill of lading.
Example: if an 18-tonne machine worth USD 450,000 shipped in a single crate is a total loss, the limit is 18,000 × 2 = 36,000 SDR. Taking one SDR at about USD 1.35, the maximum amount recoverable from the carrier remains below USD 50,000.
Beyond the limit, there are also cases of exemption from liability. Under Article 1180 of the TTK, if the loss arose from an act relating to the navigation or technical management of the ship, or from fire, the carrier is liable only for its own fault; navigational errors by the master or crew cannot be attributed to the carrier. In that case, the cargo owner can only obtain compensation from its own insurance.
How does general average affect the cargo owner?
Article 1272 of the TTK defines as general average any extraordinary sacrifice or expenditure intentionally made to protect the ship and cargo together from a common danger. Flooding the holds to extinguish a fire on board, hiring a salvage tug or putting into a port of refuge are typical examples. These costs are shared between ship, cargo and freight in proportion to their values according to the York-Antwerp Rules. A shipper whose own cargo was not damaged at all also pays a contribution and cannot take delivery of its cargo without providing security. For insured cargo, the insurer provides this security; for uninsured cargo, a cash deposit may be required. Details are in the general average entry.
Which risks stand out in container shipping?
- Package count: Under TTK 1186/3, if the packages inside a container are listed individually in the bill of lading, the limit is calculated separately for each package; if not, the container counts as a single package.
- Condensation: Temperature differences cause sweating inside the container; moisture-sensitive cargo needs desiccants and suitable packaging.
- Stowage and securing: Inadequate stowage carried out by the insured itself may fall under the insufficient packing exclusion in the ICC clauses.
- Deck cargo: For containers lost overboard in heavy weather, it should be checked whether the policy covers deck cargo.
What should be checked when setting up the policy?
- Who takes out the insurance is determined by the terms of sale; under CIF and CIP the seller does, under FOB and CFR the buyer.
- The sum insured is usually based on the invoice value plus freight and 10% expected profit; for the calculation, see the sum insured for cargo insurance entry.
- The clause, the deductible and the warehouse-to-warehouse period are checked.
- When damage is noticed, a report is drawn up during unloading and written notice is given to the carrier without delay.
How does Voltim Global support this?
Most of the more than 450 shipments Voltim Global has made from Russia to Akkuyu since March 2024 went via the Tuapse–Taşucu Ro-Ro line, that is, on a route that includes a sea leg. For such shipments, whether the international transport insurance cover runs uninterrupted across both the land and sea legs is checked together before loading.