UK to USA Cargo Insurance: A Practical Guide for Exporters and Importers

Introduction: why UK–USA cargo needs specialist cover

Shipping goods from the UK to the USA can look straightforward on paper: book a freight forwarder, choose sea or air, clear customs, deliver. In reality, it’s a long chain of handovers—warehouse to port, port to vessel, vessel to US port, customs, onward haulage—each step adding exposure to loss, theft, damage, delay, and paperwork errors.

Cargo insurance is designed to protect the value of your goods (and your cashflow) when something goes wrong in transit. The key is matching the policy to your route, your Incoterms, your commodity, and your contractual responsibilities.

What is cargo insurance (and what it isn’t)

Cargo insurance (also called marine cargo insurance) covers physical loss of or damage to goods while they are being transported. “Marine” here doesn’t just mean sea freight—it commonly includes air, road, and rail legs as part of a single transit.

Cargo insurance is not the same as carrier liability. Carriers (shipping lines, airlines, hauliers) usually have limited liability under international conventions, and that liability can be far below your invoice value—especially for high-value, low-weight goods.

Why carrier liability is rarely enough

If your shipment is damaged or goes missing, the carrier’s liability is typically capped by weight, not by value. That means:

• A small, high-value shipment can be severely under-compensated.

• Some causes of loss may be excluded under the carrier’s terms.

• Strict time limits apply for notifying damage.

Cargo insurance is designed to pay based on the insured value you choose (within policy terms), rather than a weight-based cap.

Common UK–USA shipping routes and risk points

Even a “simple” UK-to-USA shipment usually includes multiple legs:

• UK collection from your premises or supplier

• UK consolidation warehouse (for groupage/LCL)

• Port handling and loading

• Sea or air transit

• US port/airport handling

• US customs clearance and inspections

• Inland trucking or rail to final destination

• Final delivery and unloading

Typical risk hotspots include:

• Warehouses and consolidation points (mis-picks, theft, stacking damage)

• Port terminals (forklift damage, container drops, water ingress)

• Container stuffing/unstuffing (poor packing, shifting loads)

• Inland trucking in the US (theft, accidents, unattended vehicles)

Who should buy cargo insurance? (Incoterms matter)

The biggest mistake is assuming “the other party” is insuring it. The correct answer depends on your contract and Incoterms.

Quick Incoterms guide (simplified)

• EXW (Ex Works): Buyer takes risk early. Buyer usually insures.

• FCA/FOB: Risk transfers earlier than many people think. Clarify where risk passes.

• CIF/CIP: Seller arranges insurance, but the minimum required cover may be limited.

• DAP/DDP: Seller carries risk to destination (and often should insure door-to-door).

If you’re the party carrying risk for any part of the journey, you should strongly consider cargo insurance—either per shipment or under an annual open cover.

Types of cargo insurance cover (Institute Cargo Clauses)

Most cargo policies reference Institute Cargo Clauses (ICC). The three common levels are:

ICC (A) — “All Risks” (broadest)

Despite the name, it’s not literally all risks, but it’s the broadest standard cover. It typically covers most accidental physical loss or damage, subject to exclusions.

Best for:

• High-value goods

• Fragile items

• Complex supply chains

• New exporters/importers who want fewer surprises

ICC (B) — named perils (mid-level)

Covers specific listed perils (for example, fire, explosion, vessel grounding, collision, earthquake, entry of sea/lake/river water, and jettison). It’s narrower than ICC (A).

Best for:

• Lower-risk commodities

• Businesses with strong packaging and low claims history

ICC (C) — basic named perils (narrowest)

A more limited list of perils. Often unsuitable for many modern shipments because common causes of damage (like handling damage) may not be covered.

Best for:

• Bulk commodities with lower susceptibility to handling damage

Door-to-door vs port-to-port cover

A practical UK–USA cargo policy should usually be warehouse-to-warehouse (door-to-door), not just port-to-port.

Door-to-door cover typically includes:

• UK collection and pre-carriage

• Storage in the ordinary course of transit

• Ocean/air carriage

• US inland transit to the final delivery point

Port-to-port can leave major gaps—especially when the highest theft and handling risks occur during inland legs and warehousing.

What value should you insure? (invoice value isn’t always enough)

Many businesses insure for invoice value, but a more realistic insured value often includes:

• Cost of goods

• Freight charges

• Duty (where applicable)

• A margin (often 10% is common) to reflect anticipated profit and incidental costs

A typical approach is CIF + 10% (or similar), but the right method depends on your contract and whether you can recover costs from the other party.

Key add-ons and extensions for UK–USA shipments

Depending on your goods and route, consider:

• Theft, pilferage, and non-delivery extensions

• War and strikes (often separate clauses)

• Temperature-controlled / refrigerated goods cover

• High-value electronics and theft-attractive goods conditions

• Pair and set cover for items that lose value if one component is damaged

• Debris removal and disposal

• Expediting expenses (to keep production running)

• Contingency insurance (when you rely on the other party to insure)

Common exclusions you need to understand

Cargo claims often fail because of exclusions or policy conditions. Common exclusions include:

• Inherent vice (goods deteriorating due to their own nature)

• Insufficient or unsuitable packing

• Delay (pure delay is often excluded unless you buy specialist cover)

• Ordinary leakage, ordinary loss in weight/volume

• Wear and tear

• Unseaworthiness (in certain circumstances)

• War, strikes, riots unless specifically covered

If you ship fragile goods, liquids, temperature-sensitive products, or high-theft items, the packing and security requirements become especially important.

Packaging and stowage: the hidden “insurance requirement”

Insurers expect goods to be packed for the journey they’re taking. For UK–USA shipments, that usually means:

• Export-grade packaging (not just domestic packaging)

• Correct palletisation and shrink-wrapping

• Moisture protection for sea freight (desiccants, barrier bags, container liners)

• Shock/tilt indicators for sensitive equipment

• Clear labelling and handling instructions

If a claim occurs and the surveyor concludes the packaging was inadequate, the insurer may reduce or decline the claim.

Sea freight vs air freight: how cover differs

Sea freight

• Longer transit times

• Higher exposure to moisture, salt air, container condensation

• Greater handling at ports and transhipments

Good practice:

• Use moisture barriers and desiccants

• Choose container type carefully (standard, high cube, reefer)

• Consider ICC (A) for higher-value loads

Air freight

• Faster transit, but still multiple handling points

• Higher risk of impact damage from rapid handling

• Strict documentation and security requirements

Good practice:

• Strong internal packaging and cushioning

• Clear documentation and declared values

LCL vs FCL: why consolidation changes the risk

• FCL (Full Container Load): Your goods fill the container; fewer touchpoints.

• LCL (Less than Container Load): Your goods are consolidated with other shippers; more handling and higher risk of crushing, contamination, and misrouting.

If you ship LCL, broad cover (often ICC A) and strong packaging become even more important.

How annual open cover works (and when it’s worth it)

If you ship regularly between the UK and USA, an open cover policy can be more efficient than arranging insurance shipment-by-shipment.

Benefits:

• Automatic cover for declared shipments

• Consistent terms and fewer admin delays

• Potentially better pricing over time

• Easier claims handling

Watch-outs:

• You must declare shipments accurately and on time

• There may be limits per conveyance, per location, or per shipment

• Some commodities or destinations may require prior agreement

Claims: what to do when something goes wrong

When a loss happens, speed and documentation matter.

Step-by-step claims checklist

1. Inspect on arrival and note damage immediately.

2. Notify the carrier/freight forwarder within required time limits.

3. Photograph everything: outer packaging, seals, container number, damage, labels.

4. Preserve evidence: keep packaging and damaged goods if safe.

5. Request a survey if required by the insurer.

6. Gather documents: commercial invoice, packing list, bill of lading/air waybill, delivery notes, correspondence.

7. Mitigate loss: take reasonable steps to prevent further damage.

Common reasons claims get delayed

• Missing paperwork (especially packing lists and proof of value)

• Late notification

• Disputes over packing adequacy

• Unclear Incoterms and responsibility

How to reduce premiums (without creating dangerous gaps)

Insurers price cargo risk based on commodity, packing, route, claims history, and security. Practical ways to improve terms include:

• Improve packaging standards and document them

• Use reputable forwarders and vetted hauliers

• Avoid high-theft routes and unattended vehicle stops

• Use GPS tracking for high-value loads

• Keep accurate shipment records and values

• Consider higher deductibles if cashflow allows

Example scenarios (UK–USA)

Scenario 1: electronics shipped UK to California (air)

Risk profile: high theft attractiveness, impact damage.

Recommended approach:

• ICC (A) warehouse-to-warehouse

• Theft/non-delivery extension

• Strong internal packaging and tamper-evident seals

Scenario 2: machinery shipped UK to Texas (sea + inland haulage)

Risk profile: heavy-lift handling, vibration, moisture.

Recommended approach:

• ICC (A) with careful packing and bracing

• Moisture protection and container stuffing photos

• Consider “project cargo” terms if oversized

Scenario 3: cosmetics shipped UK to New York (LCL)

Risk profile: crushing, contamination, temperature swings.

Recommended approach:

• ICC (A) and robust outer cartons

• Clear labelling and pallet protection

• Consider temperature conditions if sensitive

Choosing the right cargo insurance partner

When you speak to a broker or insurer, be ready to share:

• Commodity description and packaging method

• Shipment frequency and typical values

• Routes (UK origin points, US destinations)

• Mode (sea/air), LCL/FCL, and any transhipments

• Security measures and storage arrangements

• Incoterms and who carries risk

A good broker will help you avoid gaps, align cover to contracts, and make sure claims handling is practical—not just theoretical.

FAQs: UK to USA cargo insurance

Do I need cargo insurance if my forwarder offers “insurance”?

Often forwarders offer cover, but it may be limited or based on standard clauses. Always check the level (ICC A/B/C), the insured value, and whether it’s door-to-door.

Does cargo insurance cover theft from a truck in the USA?

It can, if your policy includes warehouse-to-warehouse cover and theft is not excluded. Some policies have conditions around unattended vehicles, security, and approved routes.

Is “All Risks” cover really all risks?

No. ICC (A) is broad, but exclusions still apply (like inadequate packing, inherent vice, and delay).

Can I insure shipments sold under CIF/CIP if the seller is already insuring?

Yes—through contingency cargo insurance—if you want protection against gaps in the seller’s policy or claims handling issues.

What documents do I need for a cargo claim?

Typically: invoice, packing list, transport document (bill of lading/air waybill), delivery receipt noting damage, photos, and correspondence with the carrier.

Call to action

If you ship goods between the UK and the USA, cargo insurance is one of the simplest ways to protect your cashflow and customer relationships. The right policy should match your Incoterms, cover the full door-to-door journey, and reflect the real value at risk.

If you want, tell me what you ship, typical shipment values, and whether you use sea or air—and I’ll suggest the most sensible cover structure and the key clauses to ask for.