Transport insurance has evolved from marine insurance, which is widely thought to be the oldest form of insurance. Transport insurance protects against risks that cargo and – less commonly – the means of transport itself might be exposed to during transportation. It is sometimes also referred to as freight forwarder’s liability insurance.
Cargo insurance falls within the category of property and casualty insurance. It can be divided into property insurance (protects movable goods) and asset insurance (protects the buyer’s expected profits, as well as any costs). The most important task of a cargo insurer is to convert an unknown value (i.e. the risk that transported goods will be lost or damaged) into a known value (i.e. the premium). In return for a certain premium, the transport insurer provides protection against loss or damage.
All-risk cover is a typical feature of transport insurance. While in transit or temporary storage, the goods are not only insured against individual risks (e.g. fire, theft), but also against other physical damage that is not down to the specific nature of the goods (e.g. spoilage of fruit and vegetables).
Cargo insurance will typically cover goods, valuables, sample collections and/or luggage.
Transport insurance sometimes insures the means of transport as well, e.g. with policies for sea and river vessels, new or converted ships, oil rigs and platforms (offshore risks), or rolling stock and containers.
An exception to this is damage insurance for road vehicles, which is always offered together with third-party liability motor insurance by a separate market. Aircraft hull insurance does not usually fall into the category of transport insurance either. Because the value of the assets at risk is so high, aircraft are usually insured through special pools. Comprehensive insurance for recreational craft is sometimes offered by individual companies in the transport sector, but more commonly by providers in other segments (e.g. motor vehicle insurance).
Freight forwarder’s liability insurance
In Switzerland and various other markets (e.g. Germany), the range of products offered by transport insurers also includes liability insurance for freight forwarders, logistics providers, carriers and warehouse operators. These companies are usually liable for the goods entrusted to them by their customers.