# Marine cargo insurance: what it costs and what it actually covers

Source: https://landedcosthq.com/blog/2026-11-12-marine-cargo-insurance/

Cross-border operations guide · November 12, 2026


**Short answer:** Marine cargo insurance typically costs 0.2 to 0.5 percent of the shipment value, and the insured value is the CIF value, the invoice plus the freight, times 1.10, times the rate. The policy covers loss or damage to the goods in transit, under the terms of the policy, which are usually Institute Cargo Clauses A, B, or C. The claim is paid on the insured value, so a policy written on the invoice value alone leaves the freight and the uplift uninsured.

## The rate, and what it is a rate on

Marine cargo insurance is priced as a percentage of the insured value, and the typical range is 0.2 to 0.5 percent of the shipment value, depending on the goods, the route, and the cover. The insured value is not the invoice value. It is the CIF value, the invoice plus the freight, times 1.10, which is the 10 percent uplift that covers the profit and the incidental costs the invoice does not show.

The arithmetic is the point. A $100,000 invoice with $10,000 of freight has a CIF value of $110,000, and an insured value of $121,000 after the uplift. At 0.3 percent, the premium is $363. A policy written on the $100,000 invoice alone insures $100,000, and the claim, when the goods are lost, is short by $21,000, which is the freight and the uplift the policy never covered.

The rate moves with the risk. A shipment of electronics on a route with a piracy history costs more than a shipment of textiles on a quiet lane, and a shipment in a season of storms costs more than the same shipment in a calm one. The underwriter prices the route, the goods, and the season, and the rate is the price of that risk.

## What the clauses cover, and what they do not

The cover is defined by the Institute Cargo Clauses, and the letter matters. Clause A is all-risks cover, which insures against all risks of loss or damage except the exclusions. Clause B is a named-perils cover, which insures against a listed set of events, including fire, stranding, sinking, and collision. Clause C is the narrowest, covering a smaller list of major casualties.

The exclusions are the same across the clauses, and they are the ones that surprise importers: loss caused by the inherent vice of the goods, loss caused by delay, loss caused by inadequate packing, and loss caused by the insolvency of the carrier. A shipment of chocolate that melts in a hot container is inherent vice, not a covered loss, and the claim is refused.

The policy also has a duty to mitigate. The importer who discovers damage has to take reasonable steps to limit it, and has to notify the insurer promptly. A claim filed weeks after the delivery, with no survey and no notice, is a claim the insurer can refuse on the delay alone.

## The claim, and the landed-cost line

The claim is paid on the insured value, and the insured value is the CIF value times 1.10. The documents the insurer needs are the policy, the commercial invoice, the bill of lading, the packing list, and the survey report, and the survey has to happen before the goods are moved or unpacked, because the survey is the evidence of the damage.

The premium belongs in the landed-cost model as a line, with the rate as an input and the insured value as a calculated field. A model that omits the insurance understates the landed cost by the premium, and a model that insures the invoice value alone understates the claim by the freight and the uplift.

And the cover has to match the term. Under CIF, the seller must insure, and the minimum cover is Clause C. Under FOB, the buyer insures, and the buyer chooses the clause. A buyer who assumes the seller insured under FOB discovers the gap when the goods are lost, and the discovery costs the shipment. [Freight surcharges are the invoice line that beats the quote, and the insurance premium is the landed-cost line that the quote never shows](https://landedcosthq.com/blog/2026-11-10-freight-surcharges-line-by-line/).

## Frequently asked questions

### How much does marine cargo insurance cost?

Typically 0.2 to 0.5 percent of the shipment value, depending on the goods, the route, and the cover. The insured value is the CIF value, the invoice plus freight, times 1.10, times the rate.

### What is the 1.10 uplift in marine insurance?

It is the 10 percent added to the CIF value to cover the profit and incidental costs the invoice does not show. A $100,000 invoice with $10,000 of freight has a CIF value of $110,000 and an insured value of $121,000.

### What do Institute Cargo Clauses A, B, and C cover?

Clause A is all-risks cover, insuring against all risks except the exclusions. Clause B is named-perils cover for a listed set of events. Clause C is the narrowest, covering major casualties only. The exclusions, including inherent vice and delay, apply across all three.

### Who insures the shipment under CIF and FOB?

Under CIF the seller must insure, with Clause C as the minimum cover. Under FOB the buyer insures and chooses the clause. A buyer who assumes the seller insured under FOB discovers the gap when the goods are lost.