A Guide to Freight Forwarders Insurance in the UK


Every year, a significant number of shipping containers is lost during transit. This, coupled with the occurrence of damaged goods upon delivery, has emphasised the importance of insurance in the logistics sector. Let's delve into the world of Freight Insurance and Cargo Insurance – two terms that are often used interchangeably but have distinct differences - which we’ll detail further in this blog.  

Freight vs cargo insurance: a clarification

  1. Freight insurance
Purpose: Freight insurance protects freight forwarders or carriers who have a legal responsibility for the goods they transport. It’s a policy intended to protect against the financial implications of lost or damaged goods during transit due to the forwarder's negligence or mistakes. Claim valuation: In the event of a claim, the compensation is usually determined by the weight of the goods under standard trading conditions. Thus, high-value items (like gold) would receive the same pay-out as low-value items (like cotton) if they weigh the same.
  1. Cargo insurance:
Purpose: This type of insurance is for those who send goods – manufacturers, wholesalers, retailers – by sea, air, rail or land. It covers the total commercial value of the items, safeguarding against various mishaps that might occur during transit, such as poor handling, accidents, fires, or theft. Cargo insurance typically covers all risks of physical loss of or damage to goods during transit, imports, exports and domestic carriage, including any incidental storage. Storage outside the ordinary course of transit can be added as an extension to a cargo insurance policy. Claim valuation: The compensation is based on the total value of the goods. This ensures the sender gets the full worth of the items if they're lost or damaged.  

Setting up & next steps!

  1. Freight insurance:
Responsibility: Freight forwarders, while not legally obligated like Employers Liability, often have a contractual responsibility via BIFA to have insurance in place. The cost of this insurance is usually passed onto the sender or customer. Cover requirements: The following elements of cover can be included in your freight forwarders liability.
  • Error and omissions (£)
  • Any one claim covering your liability under BIFA conditions (£)
  • Hazardous goods, alcoholic goods, thief attractive goods etc.
  1. Cargo Insurance:
Responsibility: Usually, it's up to the shipment's owner to secure cargo insurance. However, in some instances, freight forwarders or carriers can facilitate obtaining this insurance for their clients as an additional service. Types of cargo insurance:
  • Marine cargo
  • Open cargo
Details covered: Cargo insurance is comprehensive. The policy might consider various details including origin and destination of cargo, route taken by the forwarder or carrier, nature of the items, and their weight, size, and dimensions.  

Transport Channels

Whether it's freight or marine/cargo insurance, both policies are versatile and can be tailored for different modes of transport, be it domestic or international. This includes transportation by land (lorry, rail), air, sea or a combination of these.


For businesses in the supply chain, understanding the differences between cargo and freight insurance is essential. Freight forwarders need to protect themselves from liabilities, while goods owners need to ensure their items' full value is protected. Choosing the right insurance policy can ensure smooth operations and peace of mind for all parties involved. This is where the expertise at Ascend Broking can make the difference. There are additional services that can be discussed as part of your insurance programme, including Employers & Public Liability, Buildings (office/contents) and Motor Fleet, including our haulage products.  

Additional Services

  • Employers & Public Liabilities
  • Buildings, office, contents
  • Motor Fleet – including our Haulage Products

Other blogs that may be of interest:

Why haulage firms need a personal broker
Marine Cargo - 'Ever Given' Suez Canal blockage impact
3 Changes in Transportation in 2023


Any questions? Please don’t hesitate to contact one of our team.

Steven.Gillespie@ascendbroking.co.uk Telephone: 07719 069 267

Recent Posts

Quick insurance proccess

Talk to an expert