Insurance makes logistics more secure. Cargo insurance (all-risk insurance) is an additional service offered alongside international freight transport. We provide all-risk cargo insurance to our clients who order sea, air, road, oversized international cargo transport, or express deliveries from us.
We arrange cargo insurance at the client’s request and as needed, based on the type of goods, value, transport route, and chosen mode of transport. We offer cargo insurance as an official reseller of the insurance company PZU. With us, you can get freight transport, customs service, and all-risk insurance from a single company, which makes the entire transport service smoother and more time-efficient.
All carriers operate under international conventions such as the CMR Convention (road transport), the Hague-Visby Rules (sea transport), and the Montreal Convention (air transport). In addition to international conventions, in Estonia the Law of Obligations Act (VÕS) also applies. These regulations limit the carrier’s liability in the event of damage or loss of goods, and the liability limits are often significantly lower than the actual value of the goods. In addition, these regulations do not cover many risks that may arise at different stages of the supply chain or in situations where the damage is not directly related to the carrier’s actions.
All-risk insurance makes it possible to mitigate these risks and ensure protection of the goods to an extent that does not depend on the liability limits of a particular mode of transport. Acting as a freight forwarder and insurance reseller, we offer our clients the opportunity to resolve freight transport, customs service, and cargo insurance as a single integrated service. This reduces the need to involve multiple parties and simplifies the entire process.
Our cargo insurance service grew out of the practical need to offer our clients a more transparent and informed approach to organising international freight transport. The actual risks of freight transport and carriers’ liability limits are often not clear to the customer, and these topics are typically addressed only modestly when ordering transport services. In our view, it is important that the client knows from the outset in which cases and to what extent the carrier is liable, and which risks fall outside the carrier’s liability.
Over the years, we have, together with our clients, developed an approach where freight transport, customs service, and all-risk insurance form a single integrated and managed process. Acting as an official reseller of the insurance company, we help select insurance coverage that matches the nature of the goods, their value, and the transport route, and we coordinate the preparation of the insurance together with the transport arrangements. This approach allows the client to make informed decisions, reducing the risk of unexpected situations arising during the transport process.
Today we serve manufacturing, industrial, and trading companies for whom international freight transport is an important part of the supply chain and where the impact of potential losses can be significant. Our role is not limited to issuing insurance, but includes advising the client throughout the transport process and, when needed, coordinating the handling of claims.
In international freight transport, the carrier’s liability is regulated by international conventions and is limited to specific liability amounts. The amount of compensation depends on the mode of transport and is generally calculated on the basis of the gross weight of the goods or per shipping unit, regardless of the actual value of the goods. The table below gives an overview of the most common carrier liability limits in international freight transport.
| Mode of transport | Applicable regulation | Carrier's maximum liability | Example (indicative) |
|---|---|---|---|
| Road transport | CMR Convention | Up to 8.33 SDR / kg | Value of goods €10,000, weight 500 kg → maximum compensation approx. €4,000–4,500 |
| Sea transport | Hague-Visby Rules | 2.00 SDR / kg or 666.67 SDR / unit | Value of goods €10,000, weight 500 kg → maximum compensation approx. €1,000–1,200 |
| Air transport | Montreal Convention | Up to 22 SDR / kg | Value of goods €10,000, weight 500 kg → maximum compensation approx. €10,000* |
| Rail transport | CIM (COTIF) | Up to 17 SDR / kg | Value of goods €10,000, weight 500 kg → maximum compensation approx. €8,000–8,500 |
Depending on the value of the goods and the specifics of the transport process, cargo insurance may be a relevant choice for any country. In practice, however, we see that cargo insurance is used more often in certain destination markets where the supply chain is longer, the transport scheme is more complex, or the value of the goods is higher. The markets listed below reflect our daily work and actual cargo insurance experience.
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Questions about cargo insurance often arise only when the goods are already in transit or when a loss event has occurred. Our aim, however, is to address these topics before transport takes place and explain early on why, when, and how it makes sense to take out all-risk insurance. These questions concern the carrier’s liability, the scope of insurance coverage, and situations in which damage to the goods is not covered by the carrier’s liability.
Below we answer the most common questions about using cargo insurance in international freight transport, based on practical situations and the current regulatory framework. If you don’t find an answer or your specific shipment is still being planned, feel free to contact us – we will help assess the risks and explain the insurance options before final decisions are made.
No, in international freight transport the carrier’s liability is limited and does not depend on the actual value of the goods. The scope of the carrier’s liability stems primarily from international conventions such as the CMR Convention in road transport, the Hague-Visby Rules in sea transport, the Montreal Convention in air transport, and CIM (COTIF) in rail transport. These regulations set maximum compensation limits that are calculated on the basis of the gross weight of the goods or per shipping unit.
In addition to international conventions, in Estonia the Law of Obligations Act (VÕS) also applies, primarily concerning the general principles of contractual relations and liability. In practice, this means that while the conventions set the limits of the carrier’s liability, Estonian law applies additionally in matters that the conventions do not directly regulate. This does not, however, change the carrier’s maximum liability limits, which derive from international regulations.
This means that even for high-value goods, the carrier’s maximum liability may be significantly below the actual value of the goods. For example, in road transport the carrier’s liability is limited to up to 8.33 SDR per kilogram of gross weight. If the value of the goods is €10,000 and the weight is 500 kg, the carrier’s maximum compensation may be in the range of approximately €4,000–4,500, depending on the SDR exchange rate. In addition, there are many situations in which the carrier is not liable at all – for example, when the damage is not directly related to the carrier’s actions.
For this reason, all-risk insurance is used in international freight transport to cover cargo losses to an extent that does not depend on the carrier’s liability limits or the mode of transport. Cargo insurance is arranged at the client’s request and as needed before transport begins, based on the value, nature, and route of the goods.
All-risk insurance is justified regardless of the transport route or destination country, primarily when the value of the goods exceeds the carrier’s liability limit. In such a situation, the carrier’s liability does not cover the actual value of the goods. Based on our experience, clients prefer additional all-risk insurance coverage.
It is important to note, however, that all-risk insurance is also justified when the value of the goods does not exceed the carrier’s maximum liability limit. International conventions do not protect freight customers in many situations where damage occurs during loading or unloading, when these operations are carried out by the senders or recipients of the goods. Accidents often happen at loading at the client’s premises or unloading at the destination – for example, when goods fall or are damaged due to the actions of an inexperienced forklift operator.
In addition, there are many situations in which the carrier is not liable because the damage is not directly related to the carrier’s actions, such as fire, natural disaster, or theft. All-risk insurance makes it possible to cover such losses as well, which fall outside the carrier’s liability.
In our experience, more than 50% of clients want additional all-risk insurance even for goods of about €1,000 in value, even when the value of the goods remains within the carrier’s compensation limits. We recommend assessing the need for cargo insurance before transport begins, based on the value and nature of the goods and possible risks throughout the entire transport chain.
Carrier liability insurance and cargo insurance are two different things, and their purpose and scope are not the same. They are often confused, especially in situations where the carrier refers to their insurance. When a carrier says they have insurance (often known as CMR insurance), this does not mean that it is cargo insurance covering the full value of the goods of the freight customer. It is the carrier’s operational insurance, which covers the carrier’s liability only to the extent arising from international regulations.
The carrier’s liability stems from the freight contract and, in international freight transport, is regulated both by international conventions and by the Law of Obligations Act (VÕS) applicable in Estonia. In practice, however, the scope and compensation limits of the carrier’s liability are determined primarily by international regulations, not by the existence of the carrier’s own insurance coverage.
The carrier’s liability is based on conventions such as the CMR Convention in road transport, the Hague-Visby Rules in sea transport, the Montreal Convention in air transport, and CIM (COTIF) in rail transport. Liability is limited to specific liability amounts, and compensation is calculated on the basis of the gross weight of the goods or per shipping unit, not on the actual value of the goods.
Cargo insurance (all-risk insurance), by contrast, is separate insurance coverage whose purpose is to compensate for damage to the goods according to the actual value of the goods, regardless of the carrier’s liability limits. All-risk insurance also covers situations in which the carrier’s liability does not apply, such as damage that occurs during loading or unloading, fire, natural disaster, or theft.
The carrier’s liability is not intended to fully cover the risks of the freight customer, but is a limited liability mechanism. Cargo insurance is therefore a conscious risk management decision that makes it possible to mitigate the economic risks associated with freight transport throughout the entire transport chain. Cargo insurance is arranged at the client’s request and as needed before transport begins, based on the value, nature, and risk level of the goods.
Cargo insurance must be arranged before the risk begins – i.e. before the goods are loaded and the transport process starts. Insurance coverage cannot be applied retroactively in situations where the goods are already in transit or where the risk has already materialised. In practice, it is most reasonable to arrange all-risk insurance a few days before the planned start date of transport, so that insurance coverage is also in force if the means of transport arrives unexpectedly earlier and loading begins earlier than planned.
Cargo insurance is arranged at the client’s request and as needed. To issue the insurance, we need specific input data from the client that allows us to assess the risks and determine the scope of insurance coverage. This data typically includes a description and condition of the goods, the value of the goods, the packaging, the route, the mode of transport, and the planned departure date. It is also important to know whether the goods are new or used, who the actual carrier is, and whether transhipments are planned in the transport chain.
After receiving the input data, we analyse the specific shipment and the associated level of risk, and forward the insurance tariff to the client together with the applicable insurance terms for confirmation before insurance coverage enters into force.
No. We do not offer cargo insurance as a standalone insurance product for freight transport ordered from another service provider. We offer all-risk insurance only when the freight transport is ordered, in part or in full, from us.
Our goal is to offer clients a full service in which freight transport, customs service, and cargo insurance are bundled into a single whole. This makes the process simpler for the client, since arranging the shipment does not require communicating with several different parties, avoiding wasted time and unnecessary effort.
If the client wishes to obtain cargo insurance without ordering freight transport and customs service from us, we recommend turning directly to an insurance company.
In the event of a claim, we coordinate the entire process, acting as a reseller of the insurance company. The client generally does not need to communicate separately with the carrier, the insurance company, or other parties – we manage the handling of the claim.
In practice, this means we provide the client with clear instructions on what documentation and input is needed to record the damage (e.g. transport documents, commercial invoice, damage description, photos). The correct handling of the claim requires cooperation from the client and the provision of the necessary materials, on the basis of which we can manage the process further.
It is important to note that the decision on compensation for the claim is always made by the insurance company in accordance with the applicable insurance terms and the documentation submitted. Our role is to manage the process and ensure that the necessary information is compiled and submitted in the correct form.
* This description is general in nature and does not apply automatically to all issued insurance policies. The exact claims handling process, liability, and compensation conditions depend on the terms of the specific insurance contract and the decisions of the insurance company.
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