Cargo insurance coverage limits are the maximum amounts an insurer will pay for covered loss, damage, theft, or destruction of goods during transit. These limits may apply per shipment, per package, per conveyance, per location, or per policy period depending on the insurance terms. In logistics, coverage limits should match the value of the cargo, freight, duties, and related costs that need protection. If the declared or insured value is too low, the cargo owner may not recover the full loss. Limits should be set at or above the full replacement value of goods to avoid underinsurance penalties.
How to Set the Right Limit
- Use the commercial invoice value plus freight charges
- Add a standard 10 percent profit margin above CIF value
- Verify whether the policy pays replacement cost or depreciated value
If goods are underinsured, the average clause may reduce claim payouts proportionally.
Learn more about Dedola’s global logistics services. Related terms: All-Risk Coverage, Total Insured Value, Declared Value.
