Commercial property insurance covers inventory at your client's location. Once it's loaded onto a truck or handed to a carrier, the standard policy typically stops. That's a gap most shipping businesses don't think about until something goes wrong in transit.
Commercial property insurance covers your client's inventory at their location. Once that inventory is loaded onto a truck, shipped to a customer, or moved between facilities, the standard property policy typically stops covering it.
For businesses that regularly ship product — manufacturers, distributors, retailers, wholesalers — that's a gap that exists on any given day.
What Cargo Coverage Does
Inland marine is the broader category; cargo coverage is the specific form that addresses goods while they're being transported. It can cover your client's outbound shipments to customers, inbound shipments from vendors, or both — regardless of whether goods move by common carrier, in-house vehicles, or a third-party logistics provider.
Unlike the standard property policy, cargo coverage follows the goods. If inventory is damaged in transit, lost during a transfer, or destroyed in a carrier accident, the coverage responds where the property policy stops.
Who Needs to Think About This
Any business that ships physical product has some exposure. The question is whether the value of goods in transit at any given time is meaningful relative to a loss.
A few situations worth flagging at renewal: businesses whose shipping volume has grown significantly; clients who recently moved to a third-party fulfillment center; businesses shipping high-value items where a single lost shipment matters; and any client who assumes the carrier's liability coverage is adequate — carrier liability is typically based on weight, not value, and often covers only a fraction of the actual goods.
The Conversation Opener
Ask whether your client ships product. If yes, ask what their carrier's liability actually covers if a shipment is lost or damaged.
Most clients haven't thought through the difference between carrier liability and the replacement cost of what they're shipping. That difference is the conversation — and it surfaces the gap.