What cargo insurance actually pays for on a chair shipment

A 40 ft container of chairs carries USD 30,000 to 60,000 of goods across 25 to 35 days at sea. Whether that money comes back after water or crush damage is decided before the container is stuffed, not after it is opened.

Published by JPChairs · Chair manufacturer in Foshan, China · 2026-10-18

Where risk transfers: FOB, CIF and DAP

Cover follows whoever owns the risk at each moment, and the three common terms place it in different hands.

• FOB: risk passes when the goods are placed on board. The buyer arranges and pays for insurance and must have cover in place before the loading date. It is the most common term and the one on which shipments most often travel uninsured.
• CIF: the seller buys insurance, but only to a minimum of 110 per cent of invoice value and usually at the narrowest level of cover. The claim still lands on the buyer, who was never party to the policy.
• DAP and DDP: the seller carries risk to the named place, normally including inland haulage. Less paperwork for you, and typically 3 to 6 per cent more per unit than FOB on the same goods.

Whichever term you use, extend the policy warehouse to warehouse. Cover that stops at the discharge port leaves the last 200 km, where most handling damage happens, unpaid.

ICC A, B and C: what each level covers

• Institute Cargo Clauses (A) cover all risks of loss or damage subject to exclusions: theft, pilferage, non-delivery, fresh and salt water, and handling breakage. On furniture, premium runs about 0.20 to 0.40 per cent of insured value on Asia to Europe and 0.30 to 0.55 per cent to the US.
• Clauses (B) is a named-perils list: fire, explosion, grounding, sinking, and entry of sea, lake or river water into the craft or container. It does not cover theft or fresh water.
• Clauses (C) is narrower again, and is the level most CIF quotations default to.
• War and strikes are separate clauses at a separate premium, usually 0.03 to 0.08 per cent. Buy them on any lane that transits a listed area.

Expect a deductible of USD 500 to 1,000 or 3 per cent of the loss, whichever is larger, and a minimum premium of USD 50 to 100. On a USD 40,000 container, all-risks cover costs roughly USD 80 to 220.

The five damage types that end in a claim

In order of frequency on our own shipments:

• Condensation and container rain. A 40 ft box holds about 76 m3 of air. A 25-day swing from 32 degrees C at loading to 8 degrees C at discharge can drop several litres of water onto the top layer of cartons. Two kilograms of desiccant per 20 ft and four per 40 ft absorbs most of it.
• Roof or door seal leaks. Even a single pinhole in a door gasket wets the last two rows. Ask for containers under 7 years old and reject patched floors or welded repairs.
• Carton crush. The bottom carton in a five-high stack carries four times its own load for 30 days. Double-wall board at 6 to 7 mm and a 1.6 m maximum stack height prevents it.
• Mould and staining. Above 65 per cent relative humidity for more than 10 days, fabric and unfinished wood mark. Packing timber at 8 to 12 per cent moisture content and wrapping in stretch film removes most of the risk.
• Shortage and pilferage. Check the seal number against the bill of lading before breaking it. A mismatch turns a shortfall into a claim; a match means the loss happened after delivery, which no marine policy covers.

The four deadlines that decide whether you are paid

• Before signing the delivery receipt: note any damage or shortfall on it, in writing. A clean signature is the single most effective way to lose a claim.
• Within 72 hours of delivery: written notice to the insurer or broker, with photographs of the whole carton, the damage at about 30 cm, and the carton label showing the batch number.
• Within 7 to 14 days: an independent survey. Keep the damaged chairs and cartons available and unrepaired until the surveyor has seen them.
• Within 30 days: the full document set: commercial invoice, packing list, bill of lading, survey report, photographs and a repair or replacement quote.

Claims against the carrier are time-barred after one year under the Hague-Visby rules, and most underwriters will not reimburse a claim raised after the goods have already been repaired or thrown out.

How much actually comes back

The insured value is normally CIF plus 10 per cent, so a USD 40,000 shipment is insured for USD 44,000. Settlement then follows one of three routes.

• Partial loss: the insurer pays repair cost, not replacement cost. Re-covering a stained seat runs USD 45 to 90 against USD 120 to 220 for a new chair landed, so adjusters approve repair whenever the figure sits below roughly 30 per cent of unit value.
• Total loss: payment of the insured value, after which the damaged goods become the insurer's salvage and cannot be sold or used without agreement.
• General average: if the vessel declares it, expect a deposit of 10 to 15 per cent of cargo value plus an average bond before the container is released. The bond is recoverable from the insurer; the delay is not.

Expect to recover 70 to 90 per cent of the loss on a documented claim, and close to nothing on one with a clean delivery receipt and no photographs.

Preventing the claim before it starts

Twelve photographs taken in ten minutes win more claims than any policy wording.

• The empty container, floor and door seals, before loading starts.
• Half loaded, showing stack height and dunnage.
• The final row, the closed doors, then the seal number legible.
• Palletise rather than loose-load where the count allows, with stretch wrap and edge protectors on the outer four corners.
• Heat-treated pallets with a legible ISPM 15 stamp. A missing stamp can hold a container for days at discharge and is not an insured loss.
• Moisture indicator cards in two cartons per container, one at the front and one at the doors.

The export carton grades we pack to are described on the factory export packing lines, and the shipping documents issued with every order are listed on the shipping documents FAQ.