Perishable Goods Cargo Insurance (Food & Pharmaceuticals): A UK Guide for Shippers, Importers and Hauliers

Introduction: why perishable cargo is uniquely risky

Perishable goods are unforgiving. A pallet of chilled meat can be ruined by a brief temperature spike. Vaccines and biologics can become unusable if the cold chain is broken for minutes. Unlike many other cargoes, the loss is often total, the evidence can be technical, and the time pressure is intense.

Perishable Goods Cargo Insurance (often arranged as a specialist form of marine cargo insurance) is designed to protect the financial value of temperature-sensitive goods while they’re in transit, in temporary storage, and sometimes during distribution.

This guide explains what perishable cargo insurance is, what it can cover, where claims often fail, and how to reduce your risk and premium.

What is Perishable Goods Cargo Insurance?

Perishable goods cargo insurance is insurance for goods that can deteriorate, spoil, or become unsafe due to:

• Temperature excursions (too warm or too cold)

• Delay (missed delivery windows, port congestion, customs holds)

• Refrigeration equipment failure

• Power loss

• Contamination or taint

• Packaging failure

• Theft and pilferage (often higher risk for pharmaceuticals)

It can be arranged for:

• Food and drink: fresh produce, meat, dairy, seafood, frozen foods, confectionery, beverages

• Pharmaceuticals and medical products: vaccines, insulin, biologics, blood products, clinical trial materials, APIs, diagnostic reagents

Policies are typically written on recognised cargo wordings (for example, “All Risks” type cover) with additional clauses and conditions tailored to perishable exposures.

Who needs it?

Perishable cargo insurance is relevant for:

• Importers and exporters

• Manufacturers (food producers, pharma manufacturers)

• Wholesalers and distributors

• Freight forwarders and logistics providers

• Hauliers and refrigerated transport operators

• Retailers with high-value or high-volume chilled/frozen supply chains

Even if a carrier has liability cover, their liability is often limited by international conventions and contract terms. Cargo insurance is usually the most direct way to protect the full value of the goods.

The biggest misconception: “the carrier will pay if it goes wrong”

Many businesses assume the courier, haulier, airline, or shipping line will cover the loss. In reality:

• Carrier liability is often limited (by weight, package, or SDR calculations)

• Contracts may exclude certain causes (including delay)

• Proving negligence can be difficult

• Claims can take time, while your business needs cashflow now

Cargo insurance is designed to respond to physical loss or damage (and, with the right extensions, temperature-related deterioration and delay-related spoilage).

What does perishable cargo insurance typically cover?

Cover varies by insurer and wording, but commonly includes:

1) Physical loss or damage in transit

This is the foundation of most cargo policies:

• Collision, overturning, fire

• Water damage

• Handling damage

• Theft

2) Temperature excursion and deterioration

This is the core perishable exposure. Policies can respond to:

• Breakdown of refrigeration machinery

• Power failure

• Incorrect temperature settings

• Door left open, seal failure

• Refrigerant leakage

Some insurers require evidence from temperature data loggers or telematics.

3) Delay-related spoilage (where insured)

Delay is a common cause of spoilage, but it is also one of the most commonly excluded causes unless specifically covered.

If you need protection for:

• Port congestion

• Customs delays

• Vehicle breakdown leading to missed delivery windows

…you may need a specific “delay” extension, often with tight conditions.

4) Contamination, taint and cross-contamination

Food and pharmaceuticals can be rendered unsaleable by:

• Odour taint (e.g., fish tainting dairy)

• Chemical contamination

• Cross-contamination due to mixed loads

• Packaging breach

These are complex claims and often depend on the policy’s definition of “damage” and any contamination exclusions.

5) Rejection by authorities or customers (limited)

For pharmaceuticals and regulated foods, a shipment may be rejected due to:

• Temperature history uncertainty

• Missing documentation

• Suspected contamination

Some policies can cover rejection when it results from an insured event (such as a proven temperature excursion). Pure “paperwork rejection” is often excluded.

6) Costs and additional expenses (optional)

Depending on the policy:

• Debris removal

• Disposal costs (especially relevant for pharmaceuticals)

• Repacking or relabelling

• Expediting costs to mitigate loss

Key cover options to consider (food vs pharmaceuticals)

Perishable cargo is not one-size-fits-all. Here are common add-ons and why they matter.

For food and drink

• Deterioration/spoilage extension: critical for chilled/frozen goods

• Contamination/taint cover: important for mixed loads and sensitive products

• Seasonal and peak-load considerations: summer heatwaves, holiday congestion

• Short shelf-life clauses: insurers may require minimum remaining shelf life at dispatch

For pharmaceuticals

• Strict cold chain conditions: validated packaging, lane risk assessments

• Temperature monitoring requirements: calibrated loggers, continuous monitoring

• High theft exposure: GPS tracking, secure parking, route planning

• Regulatory disposal costs: controlled destruction and documentation

• Clinical trial materials: bespoke wording, high value, time-critical delivery

Common exclusions and pitfalls (where claims often fail)

Perishable cargo claims can be denied or reduced due to exclusions or conditions. Common issues include:

1) Inherent vice and ordinary deterioration

Insurers generally won’t cover goods that spoil because they were already unstable, poorly packed, or near expiry.

2) Insufficient packaging or preparation

If packaging is not suitable for the journey duration and conditions, insurers may argue the loss was foreseeable.

3) Delay (unless specifically insured)

Delay is a frequent cause of spoilage, but often excluded unless endorsed.

4) Temperature conditions not complied with

If the policy requires:

• Pre-cooling the trailer

• Maintaining a set range

• Using calibrated loggers

…and you cannot evidence compliance, the claim may be challenged.

5) Unattended vehicle and security conditions

For high-value pharmaceuticals, insurers may require:

• Approved secure parking

• Two-driver rules

• Alarmed/immobilised vehicles

Non-compliance can invalidate cover.

6) Known defects or poor maintenance

If refrigeration equipment is not maintained, or alarms are disabled, insurers may rely on maintenance-related exclusions.

How insurers assess risk (and what affects premium)

Insurers typically look at:

• Commodity type (frozen vs chilled vs ambient; vaccines vs OTC)

• Value per shipment and annual turnover

• Route and transit time (domestic, EU, worldwide)

• Mode of transport (road, sea, air, multimodal)

• Packaging method (active vs passive temperature control)

• Refrigeration equipment type and maintenance records

• Temperature monitoring and alarm response procedures

• Security controls (especially for pharmaceuticals)

• Claims history and loss ratios

The more evidence you can provide that your cold chain is controlled and auditable, the more competitive the terms tend to be.

Risk management: practical steps to reduce losses

Insurers love controls that prevent losses and make claims easier to prove.

Cold chain controls

• Use validated packaging and lane qualification for pharmaceuticals

• Pre-cool trailers and verify set points before loading

• Use calibrated temperature loggers and keep calibration certificates

• Use door sensors and alarm alerts

• Define escalation steps if temperature deviates (who is called, what action is taken)

Operational controls

• Clear loading plans to avoid mixed-load contamination

• Robust SOPs for handovers and cross-docking

• Contingency plans for delays (backup cold storage, alternative routes)

• Training for drivers and warehouse teams

Security controls (especially pharma)

• Route planning and avoidance of high-risk stops

• Secure parking only, with documented compliance

• GPS tracking and geofencing

• Seal controls and tamper-evident packaging

Claims: what you’ll need if something goes wrong

If a perishable shipment is compromised, speed and documentation matter.

Typical evidence includes:

• Bill of lading / CMR / airway bill

• Commercial invoice and packing list

• Temperature logs (raw data, not screenshots)

• Proof of set point, pre-cooling and loading checks

• Photos of packaging, seals, and any damage

• Maintenance records for reefer unit (if relevant)

• Surveyor reports and lab test results (contamination)

• Disposal certificates (pharma)

A good broker will help you build a “claims pack” quickly and coordinate surveyors.

Choosing the right policy structure

There are two common ways to arrange cover:

1) Annual open cover (turnover-based)

Best for businesses shipping regularly.

• Declares shipments or turnover

• Consistent cover terms

• Often more efficient for high volume

2) Single shipment cover

Best for occasional shipments or very high-value consignments.

• Cover arranged per consignment

• Useful for one-off urgent pharma shipments

Your broker can also explore hybrid options if you have both routine food distribution and occasional high-value pharma movements.

How perishable cargo insurance fits with other covers

Perishable cargo insurance is only one piece of the risk puzzle. Depending on your role, you may also need:

• Goods in Transit insurance (for hauliers carrying others’ goods)

• Haulage liability / carriers liability (covers legal liability, not full cargo value)

• Product liability (if food causes illness, or a pharma product is defective)

• Professional indemnity (for logistics advice, freight forwarding services)

• Cyber insurance (temperature monitoring systems, ransomware disrupting operations)

The right structure avoids gaps and reduces disputes about which policy should respond.

Quick checklist: what to tell your broker

To get accurate terms, prepare:

• Commodity details and temperature ranges

• Packaging method (active reefer, passive packaging, dry ice)

• Typical transit duration and routes

• Maximum value per load and annual shipping value

• Storage points (ports, cross-docks, temporary cold stores)

• Monitoring method (logger type, calibration frequency)

• Security measures (tracking, secure parking, two-driver rules)

• Any previous losses or near-misses

FAQs

Does perishable cargo insurance cover spoilage?

It can, but spoilage is often covered only when caused by an insured event (such as refrigeration breakdown or a temperature excursion) and subject to conditions. Always check the wording for deterioration and delay.

Is delay automatically covered?

Usually not. Delay is commonly excluded unless specifically endorsed, and even then it may have strict triggers and waiting periods.

Do I need temperature data loggers?

For many perishable policies, yes. For pharmaceuticals in particular, loggers and auditable temperature records are often essential both for compliance and for claims.

What if the goods are rejected even though they look fine?

Rejection can be covered if it results from an insured event (for example, a proven temperature excursion). Rejection due to paperwork issues or commercial disputes is often excluded.

Does this replace carriers liability insurance?

No. Carriers liability covers your legal liability under contracts and conventions. Cargo insurance is designed to protect the goods’ value regardless of whether the carrier is legally liable.

Can I insure mixed loads (food plus non-food items)?

Yes, but mixed loads increase contamination/taint risk. You may need specific conditions around segregation, packaging, and compatible commodities.

Conclusion: protect the cold chain and your balance sheet

Perishable goods cargo losses are expensive, fast-moving, and often complex. The right insurance can protect your cashflow, preserve customer relationships, and help you recover quickly after a temperature incident, theft, or transit disruption.

If you ship temperature-sensitive food or pharmaceuticals, the best approach is to combine strong cold chain controls with a policy that clearly addresses deterioration, temperature excursion, and (where needed) delay.

Need help arranging Perishable Goods Cargo Insurance? If you can share what you ship, the temperature range, typical routes, and maximum value per load, we can map the right cover and the key clauses to watch so you avoid nasty surprises at claim time.