Maritime transport insurance, an essential component of international Logistics

What is maritime transport?

Maritime transport forms the backbone of global commerce, carrying more than 80% of internationally traded volumes.
In 2023, it handled 12.3 billion tons of cargo—a 2.4% increase from 2022—and is projected to grow by 2% in 2024 and an average of 2.4% annually through 2029.

The three main goods transported by container are:

• Electronics (computers, smartphones, TVs)

• Clothing and textiles (ready-to-wear, fabrics, accessories)

• Industrial machinery and equipment (machine tools, mechanical parts)

Carrier liability limits and exemptions

Maritime transport, though indispensable to global trade, exposes cargo to many risks: inherent vice, force majeure (storms, piracy, shipwrecks), sender’s errors, or third-party actions. Carrier liability is limited by international conventions, and maritime transport insurance is specifically designed to cover such risks.

>Exemption Cases

Generally, the carrier is presumed liable if the goods are delivered in a condition different from how they were loaded (damages, losses, etc.).

However, if the carrier can prove all necessary precautions were taken and liability is not engaged, no compensation is due to the shipper.

Carriers may be exempt from liability in cases such as:

• Inherent defect of the goods

• Force majeure (extreme weather, piracy, shipwreck)

• Fault of the shipper or consignee (e.g., insufficient instructions)

• Third-party actions (e.g., collision with an identified ship)

In cases of gross negligence (e.g., proven carelessness, theft, or fraud), courts may lift liability caps, allowing full compensation based on the total damage suffered.

>Carrier Liability Limits – Compensation Caps

Even when liable, maritime carriers benefit from statutory compensation limits, which are often insufficient relative to the true cargo value. Default insurance (by the carrier, freight forwarder, or bank) is capped in SDRs (Special Drawing Rights) per kilo, often leaving a financial shortfall for the shipper.

Hague–Visby Rules set the limit at 2 SDR/kg (1 SDR = €1.23 as of July 2025).

Example:

A shipment of 25 tons of bulk vegetable flour, worth €250,000, is entrusted to a maritime carrier.

A storm causes the container to fall into the sea.

According to carrier limits:
2 SDR (€2.46) × 25,000 kg = €61,500 compensation

Loss for the shipper:
€250,000 − €61,500 = €188,500

Note: In case of gross negligence, courts may remove compensation limits, allowing full damages to be claimed.

The special case of general average covered by maritime transport insurance

General average is a major principle of maritime solidarity recognized worldwide. It obliges all parties involved in a voyage (owner, charterers, shippers) to share exceptional losses and expenses caused by an incident at sea.

Voluntary sacrifices made to save the “maritime adventure” such as partial cargo discharge or salvage costs are proportionally shared, even by undamaged cargo. Maritime transport insurance helps absorb these often considerable costs.

The role of incoterms in maritime transport

Incoterms define who seller or buyer bears the risks and insurance obligations during the main maritime transport, helping determine who pays for damages.

• Departure Incoterms (CIF – Cost, Insurance and Freight): The buyer assumes the risk during maritime transport, but the seller takes out maritime transport insurance on the buyer’s behalf.

• Arrival Incoterms (DAP, DDP, etc.): The seller assumes transport risks and may choose whether or not to insure the cargo.

Insurance and guarantees at CSE Global

At CSE Global, maritime transport insurance solutions are modular and tailored to each shipper’s risk profile:

Ad Valorem Insurance

• Covers the actual value of the goods (including margin and profit), not limited by weight or number of packages.

• Optional 20% increase over declared value to cover margin loss or incidental costs.

Additional Guarantees

• FPA (“Free of Particular Average”): Covers major risks (shipwreck, fire, general average, collision) with a defined list of exclusions.

• All Risks: Comprehensive protection against breakage, theft, crushing, damage, including pre- and post-land transport.

• War Risks and Similar: Optional coverage for piracy, sabotage, strikes, riots, and malicious acts, priced according to the affected zone.

End-to-end options: Extend coverage to storage, transshipments, handling, voyage interruptions or breakdowns (e.g., unloading, warehousing, rerouting).

>Choosing the Right Insurance Policy

Once risk-bearing responsibility is defined (buyer or seller) and guarantees selected, the choice of maritime transport insurance policy depends on:

• Quantity of goods to be transported

• Value of the goods

• Shipment frequency over the year

Types of Policies

• Third-party shipper policy: Basic coverage via carrier or forwarder, compliant with international conventions (Hague–Visby), suited for occasional, low-budget needs.

• Voyage policy: One-off contract for a single shipment or charter.

• Floating/open policy: Framework agreement for recurring shipments, with declared values and shipment manifests.

• Annual subscription policy: Flat-rate solution covering all shipments by a shipper across all transport modes, simplifying admin and financial management.

Thanks to this comprehensive offering, CSE Global provides maximum flexibility: clients can configure coverage levels, adjust deductibles, and extend protections based on cargo type, routes, and contractual needs (Incoterms).

Given the scale and complexity of maritime risks, choosing an experienced insurer and customizing your maritime transport insurance policy is crucial. Reviewing deductibles, exclusions, and special coverages ensures the continuity of your supply chains and protects your investments against maritime hazards