GENERAL
Your guide to secure cargo transport
Freight insurance, also known as cargo insurance, is a specialised insurance policy that can protect your goods against financial loss from damage, loss or theft while they travel by road, rail, sea or air, subject to the policy terms, conditions and exclusions. In shipping, unexpected events can disrupt even carefully planned deliveries, and freight insurance acts as a safeguard so your business does not carry the full cost.
How does freight insurance benefit your business?
- Financial protection: if your cargo suffers damage, loss or theft during transit, freight insurance can reimburse you for the insured value, subject to the policy terms, conditions and exclusions. This safety net stops your business from bearing the brunt of unforeseen events.
- Going beyond carrier liability: carriers offer basic liability cover for your shipments, but it often comes with limitations. Freight insurance can provide broader protection, including risks that fall outside the carrier’s responsibility. Learn how carriers legal liability works.
- Peace of mind: knowing your shipment is insured lets you focus on your core business operations instead of worrying about potential risks.
Why is freight insurance important?
The shipping process is inherently unpredictable. Bad weather, accidents, mishandling or theft can damage, destroy or take your cargo. Freight insurance acts as a shield against these unforeseen events, helping you avoid financial loss if something goes wrong.
What does freight insurance cover?
Cargo insurance policies come in various forms with a range of cover options. Generally, they can protect you from losses due to:
- Physical damage: damage to your cargo caused by accidents, weather events or improper handling during transport.
- Theft: partial or complete theft of your shipment.
- Loss: loss of your cargo during transport.
Exactly what is covered depends on the policy terms, conditions and exclusions. Our cargo and transit insurance FAQs explain common extensions and exclusions in more detail.
Where can you get freight insurance?
Cargo insurance can be obtained from specialised insurers, insurance brokers or even some freight carriers. When choosing a policy, consider the value of your goods, the shipping route and the specific cover you require. The Insurance Council of Australia has general information about how insurance works in Australia.
Freight Insurance Services International (FIS International) is an Australian insurance broker based in Moorabbin, Melbourne. We arrange cargo and transit insurance with insurers (the insurer underwrites the policy) and can help you if you need to make a claim. Learn more about our team.
By investing in freight insurance, you help protect your valuable cargo and give your business financial security throughout the shipping process.
Frequently Asked Questions
Is freight insurance compulsory in Australia?
For most shipments, no law requires it. However, your sales contract, bank, lender or customer may require it, and without it you rely on the carrier’s limited liability if goods are lost or damaged.
Is freight insurance worth it for low-value shipments?
It depends on whether your business could absorb the loss. Carriers often limit their liability by weight or package, so even moderate-value goods can be under-protected. If you ship regularly, an annual transit policy can be more cost-effective than insuring each consignment.
Can individuals buy freight insurance, or only businesses?
Individuals can buy it too. If you are relocating or sending a vehicle, boat, caravan or household goods, single transit or home removals insurance can protect them on the journey.
This information is general in nature and does not take into account your objectives, financial situation or needs. Please read the policy wording and our Financial Services Guide before deciding.
