Guides · Cargo insurance
Marine insurance is optional. What it adds to your customs value is not.
Shafiq Traders · Updated 14 September 2026
Marine cargo insurance covers physical loss or damage to the cargo itself in transit — something a carrier's own liability, capped by weight or package under the bill of lading, does not fully replace. It is not compulsory, and Shafiq Traders does not sell or arrange it. The customs point that actually matters is section 25(2)(a) of the Customs Act: the cost of insurance, where a policy exists, is added to the price actually paid or payable to arrive at the customs value that duty and sales tax are assessed against. Whether a policy exists, and what the premium cost, is therefore part of what gets assessed on your declaration, not a private matter between you and an insurer.
What this actually covers, and what it doesn't
A bill of lading gives the carrier limited liability for cargo lost or damaged in transit, calculated by weight or by package under the contract of carriage, not by what the goods are actually worth. Marine cargo insurance is a separate policy, taken out by the cargo owner, that pays against the real value of a loss instead of whatever the carrier's own tariff caps it at. Nobody arranges this for an importer automatically — not the shipping line, not a forwarder, not this office.
It covers physical loss or damage to the cargo itself: a container that goes overboard, water ingress into a hold, breakage in handling, theft from a container yard before the goods clear. It does not extend or replace the carrier's own liability, and it has nothing to do with how customs assesses the shipment once it lands — that runs on a separate set of rules, below.
The clauses that actually get sold
Most marine cargo policies are written against one of three standard sets of clauses. Institute Cargo Clauses (C) covers a short, named list of major casualties — fire, explosion, the vessel sinking, stranding or capsizing — and nothing outside that list. Clauses (B) covers a longer list of named perils, including things like water damage from heavy weather and goods washed overboard, still on a named basis rather than open cover. Clauses (A) is written as all-risk: cover for physical loss or damage from any cause, subject to a shorter list of standing exclusions, rather than a list of what is covered.
Which one suits a shipment is a question for an insurer or a broker, not for a clearing agent. A high-value or fragile consignment on a long voyage is a different conversation from a bulk commodity that is cheap to replace, and that conversation belongs before the goods are booked, not after they are already at sea.
Where insurance sits in what customs actually assesses
| Element | How it enters the customs value |
|---|---|
| Price actually paid or payable for the goods | The starting point for the customs value |
| Cost of transport to the port of importation | Added, if not already included in the price |
| Loading, unloading and handling to that point | Added, if not already included in the price |
| Cost of insurance | Added, if not already included in the price, where a policy exists |
Why a premium ends up in a customs file
Section 25 does not ask what an importer thinks a shipment was worth. It builds the customs value from the price actually paid or payable, plus specific additions, and the cost of insurance is one of them, where a policy exists. That means the premium actually paid, not an estimate — the Customs Rules require an addition of this kind to rest on objective, quantifiable data, not a guess entered to make a total look right.
Practically, that is why a policy and its premium belong in the same file as the invoice and the packing list, not held back as a separate matter between the importer and the insurer. Where a policy exists, we declare against it. Where none exists, there is no default insurance figure added in its place — the value is still built from whatever transport and handling documentation the shipment actually has, and an absence of insurance is not, on its own, grounds for a lower value to pass without being asked about.
This firm does not sell or arrange marine cargo insurance, and we will not quote you a rate for it. If you want cover, that is a conversation with an insurer or a broker, before the shipment moves. What we need afterward is the policy and the premium actually paid, because that is what goes into the declaration under section 25 — not a figure we supply on your behalf.
Questions
What importers ask us about marine cargo insurance
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Give us the product, the port and roughly when the vessel is due, and we will tell you what the clearance involves and what it will cost.