Guide
Shipping insurance from China: what a carrier pays and what it does not
A carrier that loses your goods pays by weight, and the amount is small. Air carriers owe up to 26 SDR per kilogram, and sea carriers up to 2 SDR per kilogram. Cargo insurance pays the value of the goods. We insure every shipment that leaves our warehouse.
By Noel Murphy, Co-founder · Updated
What a carrier owes by law
International treaties limit what a carrier pays when goods are lost or damaged.
| Transport | Treaty | Limit |
|---|---|---|
| Air | Montreal Convention | 26 SDR per kilogram |
| Sea | Hague-Visby Rules | 2 SDR per kilogram, or 666.67 SDR per package if that is higher |
| Road in Europe | CMR Convention | 8.33 SDR per kilogram |
One SDR is worth about US$1.3 to US$1.4.
A 10 kg carton of electronics worth $5,000 goes missing on a flight. The limit is 260 SDR, about $350.
A 100 kg pallet worth $10,000 falls into the sea. The limit is 666.67 SDR for the package, about $900.
What liability leaves out
- Events outside the carrier’s control, such as storms.
- General average. After a fire or a grounding, cargo owners share the cost of the rescue.
- Loss after delivery. A carrier’s duty ends with the delivery scan. Ask for a signature on parcels of high value.
What cargo insurance covers
Cargo insurance pays the value on the commercial invoice, from the door of the warehouse to the door of the receiver. It covers loss, damage, theft in transit and your share of general average.
How we cover your goods
We insure every shipment from our Shenzhen warehouse to the destination. If a carrier loses or damages goods, we file the claim and pay you once the insurer validates it, in most cases within 14 days.
How to make a claim that succeeds
Insurers refuse claims that lack proof. Take these four photographs before you move or throw away anything.
- The shipping label, sharp enough to read.
- The outside of the carton, with the damage in view.
- The packing inside.
- The damaged goods.
Keep all the packing until the claim is paid. Write the damage on the delivery receipt when you sign for the goods. Tell us the same day.
When insurance matters most
The gap between the legal limit and the value grows with the price of the goods. A carton of phone cases loses little at the legal limit. A carton of electronics loses most of its value.
Questions
Is carrier liability the same as insurance?
No. Liability is the most a carrier must pay by law, and the law sets it by weight. Insurance is a contract that pays the value of the goods.
What is an SDR?
A Special Drawing Right is a unit set by the International Monetary Fund. One SDR is worth about US$1.3 to US$1.4. The treaties that limit carrier liability use it.
What is general average?
When a ship's crew gives up cargo or pays for rescue to save the voyage, all cargo owners share the cost. You must pay your share before the line releases your container. Cargo insurance covers it.
How soon must I report damage?
At once. The Montreal Convention gives 14 days for damaged air cargo. Sea carriers expect notice within 3 days when the damage does not show on the outside.