Cargo Insurance from China: Key Aspects of Minimizing Risks During Transportation

Shipping products from China is a complicated process with numerous steps and potential risks. These risks can vary from delivery delays and cargo damage to customs issues and other unforeseen circumstances. All of these risks can harm your company's finances and reputation. The article discusses the critical aspects of cargo insurance during transportation from China.

Types of insurance policies available for cargo transportation

Insuring sea and air freight cargo from China is essential for protecting your business from potential risks. Let's look at the types of insurance policies you can use to protect your interests.

All-risk insurance. This type offers the most comprehensive risk coverage for shipping goods. It covers any cargo loss or damage due to unexpected events such as fire, flood, theft, and other related incidents. It is the most in-demand insurance while shipping goods from China.

Partial loss insurance. This type of insurance covers losses resulting from partial cargo damage. Compensation is based on the percentage of damage to the cargo's total value.

Insurance against cargo destruction. Compensation is provided in case of complete cargo destruction or loss. The compensation amount depends on cargo value and policy terms.

When selecting an insurance policy, it is crucial to consider your business's specifics, cargo characteristics, transportation route, and many other factors.

Getting advice from insurance experts can help you find the best insurance policy for your needs.

What does the cost of cargo insurance depend on?

The cost of insurance varies depending on various factors. Here are a few for your consideration.

• Cargo value. The more expensive the cargo, the higher the insurance cost will be. The standard fee for sea freight shipping is usually 2% of the invoice value.
• Cargo delivery route. Cargo delivery routes can be risky due to weather, politics, or theft, leading to higher insurance fees.
• Type of cargo. Valuable or non-standard items, e.g., electronics, medicines, or chemicals, may require higher insurance fees due to increased risk of damage or loss.
• Type of transport. For example, ocean freight and air freight from China may have different insurance fees.
• Insurance company and selected conditions. Different insurance companies may offer varying fees and terms. A thorough analysis of insurance policies and their terms and conditions can help you to find the most suitable option.

Cargo insurance terms and conditions include compensation procedures in case of cargo loss or damage and detailed instructions for loss assessment.

Understanding your insurance policy terms is crucial to ensure proper protection for your cargo and business.

Problems Covered by Cargo Insurance from China

Cargo insurance from China covers risks directly related to transportation. Here are the most common insurance cases:
Cargo Damage (≈40-50% of cases)

• Improper loading/unloading
• Vibrations and impacts during transportation
• Wetting (especially during sea transportation)
• Packaging decompression

Loss or Theft (≈20-30%)

• Theft at port, warehouse, or during transshipment
• Complete loss of container (e.g., due to falling overboard in a storm)
• Cargo theft during transit (especially relevant for road and rail transportation)

Accidents and Force Majeure (≈10-15%)

• Road accidents during road transport
• Shipwreck, plane crash (rare, but with significant losses)
• Natural disasters: storm, earthquake, flood
• Fires, explosions at warehouse or ship

Documentation Errors and Delays (≈10%)

• Errors in waybills
• Customs delays
• Certification issues (leading to fines and delays)

Third-party Actions (≈5%)

• Fraud by carriers
• Port worker strikes
• Piracy (rare, but happens in Southeast Asia)

Usually, insurance does not cover manufacturing defects, defects, or non-compliance of the product with the stated specifications. How can you secure your business if you're buying goods from China?
There are two options:

• Warehouse services in China with inspection of goods upon arrival from the supplier. The batch is checked for manufacturing defects and non-compliance. Inspectors create a report. While the cargo has not yet been shipped, you can return the defect or get compensation from the seller.
• Extended insurance can cover manufacturing defects if they are detected upon receipt. This policy is issued as a separate service and requires proof of defects (inspection reports, photos, expert opinions). Relevant for expensive goods or very large wholesale orders.

The best option is to search for supplier in China who will reliably deliver quality products. To calculate the cost of inspection from DiFFreight, schedule a consultation.

Cargo Insurance from China Quickly and Without Problems

DiFFreight provides services for organizing and supporting container shipments from China. Our experts will help you choose the most convenient mode of transportation and an optimal insurance plan that meets the specifics of your business and your logistics needs. Don’t risk your peace of mind and financial well-being – contact DiFFreight for supply chain setup and cargo insurance. We work to ensure your business moves forward, no matter the circumstances.