Cargo Insurance: CMR Liability vs Goods-in-Transit Cover
Cargo insurance covers two different policies: the carrier's CMR liability insurance and your own goods-in-transit cover. Learn the 8.33 SDR limit, Incoterms rules and the claims process.
Cargo insurance is the general name for cover that protects goods against loss and damage while they are being transported. In international road freight it usually means two different policies that buyers often confuse: CMR liability insurance, which protects the carrier's legal liability, and goods-in-transit insurance (marine cargo insurance), which protects the real value of the goods. The two are not alternatives; they complement each other.
The most common mistake made by importers is to hear "the truck is insured" from a supplier or carrier and not arrange any policy of their own. In reality the carrier's CMR liability is limited per kilogram and applies only when the carrier is at fault. This guide explains when each policy pays, who should buy it under Incoterms and what to do when goods arrive damaged.
CMR liability insurance: what it covers
CMR insurance is liability insurance that covers the obligations a road carrier has under the CMR Convention on the international carriage of goods by road. The carrier takes out the policy. What is insured is not your cargo but the carrier's duty to pay compensation for loss, damage or delay.
Under the Convention, the carrier's liability is limited to 8.33 SDR (Special Drawing Rights, a basket currency of the International Monetary Fund) per kilogram of gross weight. For example, whatever the value of 500 kilograms of electronics on a pallet, a claim against the carrier cannot exceed this limit. For high-value goods the gap between the limit and the real value is large.
The carrier can also escape liability if it proves that the damage was not its fault. Insufficient packing, faulty loading by the sender, the inherent nature of the goods and force majeure are outside the carrier's responsibility. We explain the liability framework of the consignment note in our guide to the CMR consignment note and TIR carnet.
Goods-in-transit insurance: why you need your own policy
Goods-in-transit insurance, also called marine cargo cover, is property insurance taken out by the owner of the goods, either the seller or the buyer, on the real value of the shipment. It pays for damage caused by the risks listed in the policy, whether or not the carrier was at fault.
International practice uses three main levels of cover:
- Total loss only: pays only when the goods are completely lost together with the vehicle; the narrowest cover.
- Restricted cover (similar to Institute Cargo Clauses C): named risks such as accident, fire, overturning and collision.
- Broad cover ("all risks", similar to Institute Cargo Clauses A): all external physical loss and damage except risks the policy expressly excludes; theft, wetting and breakage are included.
The sum insured is usually the invoice value plus freight plus about 10 per cent for expected profit. The premium depends on the goods, route, transport mode and level of cover.
Regular importers often prefer an annual open policy: shipments are declared to the insurer periodically and the premium is based on total volume, which reduces paperwork and cost per shipment.
CMR insurance vs cargo insurance: comparison
| Criterion | CMR liability insurance | Cargo (goods) insurance |
|---|---|---|
| Type of insurance | Liability insurance | Property insurance |
| Who buys it | The carrier | Seller or buyer (owner of the goods) |
| What is insured | The carrier's duty to compensate | The goods themselves, at real value |
| Compensation limit | 8.33 SDR per kilogram | Sum insured stated in the policy |
| Fault required | Carrier must be at fault | No fault needed; the risk must be covered |
| Scope | Road transport under the CMR Convention only | Road, sea, air, rail and combined transport |
| Force majeure | Not covered | Covered depending on the level of cover |
| Who gets paid | The injured party claims against the carrier | The insured is paid directly by the insurer |
The conclusion is clear. If your goods are worth more than 8.33 SDR per kilogram, or you want protection against risks that are not the carrier's fault, you need your own goods policy. The carrier's CMR policy is a minimum check, not a replacement.
Who should arrange cargo insurance? The Incoterms link
Who insures the goods depends on the delivery term in your contract with the supplier. Under CIF and CIP the seller must insure the goods in favour of the buyer: CIP requires broad cover (clause A), while CIF requires only minimum cover (clause C). Under EXW, FCA and FOB the risk passes to the buyer early, so the buyer should think about insurance. Under DAP and DDP the risk stays with the seller until the destination.
We explain the risk transfer point of each term in our article on Incoterms 2020. The practical rule: as long as the risk is yours, make sure the goods are insured, and never assume the other party has done it. Under CIF or CIP, ask the supplier for the insurance certificate and check the cover level.
Cargo insurance across different transport modes
At sea the carrier's liability falls under other regimes, such as the Hague-Visby Rules, and the limits are also low. Sea-specific risks such as general average also apply, so broad goods cover is almost standard in container shipping from Turkey.
On the railways a similar limited liability applies under the CIM consignment note. In project cargo and oversized freight, loading, unloading and crane operations are separate risk points, so make sure the policy covers these stages too.
For refrigerated cargo, spoilage caused by a temperature deviation is usually excluded from standard policies. If you buy fresh fruit, vegetables or cut flowers from the Antalya region, ask your insurer whether this risk can be added with an extra clause.
Reporting damage and making a claim
Even with a good policy, deadlines are critical. In road transport, visible damage must be noted on the CMR consignment note at delivery. For hidden damage, the carrier must be notified in writing within seven days of delivery (Sundays and public holidays excluded). The insurer must be informed within the period stated in the policy, which is usually "immediately".
- Photograph the damage at delivery and write a reservation on the CMR note.
- Send written notice of the damage to the carrier and to the insurer.
- Keep the goods as they are until the surveyor inspects them; do not destroy or repair them.
- Collect the invoice, packing list, CMR note, damage report and photographs.
- After the surveyor's report, submit the claim according to the policy conditions.
Insurance and liability rules should be checked against current regulations, the Turkish Ministry of Trade and the rules of the destination country.
What to check when choosing a carrier
The carrier should hold a valid CMR liability policy covering all countries on the route. You can insure the goods in your own name, or through an open policy arranged by your freight forwarder. Which option is used should be confirmed in writing at the quotation stage.
A low quote is often a quote without insurance, so compare like with like. You will find other selection criteria in our guide on how to choose a freight forwarder in Turkey.
Frequently asked questions
Is cargo insurance compulsory?
Cargo insurance is not required by law. However, under CIF and CIP the seller must arrange it under the contract, and carriers normally insure their CMR liability.
Will CMR insurance pay the full value of my goods?
No. Compensation is limited to 8.33 SDR per kilogram and is paid only when the carrier is at fault. For full value you need a goods policy.
How much does cargo insurance cost?
The premium is a small percentage of the sum insured. Goods type, route, mode and level of cover decide the rate; ask an insurer for an exact figure.
How long do I have to report damage?
In road transport, report visible damage at delivery and hidden damage in writing to the carrier within seven days. The deadline for the insurer is stated in the policy; a late report puts the claim at risk.
BNK Lojistik, based in Muratpaşa, Antalya, plans road, sea and rail freight to Europe, Russia, Central Asia, Iran and China, and agrees the right insurance approach for the value and route of your cargo at the quotation stage. Send your shipment details through our quote form or call us on +90 542 485 53 70 or message us on WhatsApp at +90 545 485 53 70.
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