Freight Insurance for Amazon & B2B Shipments: What’s Covered & What’s Not

Freight insurance is one of the most misunderstood parts of international shipping — not because it’s complicated, but because most importers never take the time to understand it until something goes wrong.

In real-world shipping, problems don’t announce themselves in advance:

• Cargo gets crushed in transit
• Containers are delayed and moisture-damaged
• Amazon labels inventory as “damaged during transportation”
• Or an entire shipment simply disappears

That’s usually when importers realize a hard truth:

It’s not about whether you had insurance —
       it’s about whether the insurance you assumed you had actually pays.

This guide doesn’t explain policy fine print.
It explains how freight insurance works in practice, including:

• What freight insurance really covers — and what it doesn’t
• Who actually bears risk at each stage of shipping
• How Amazon sellers, DDP buyers, and B2B importers should approach insurance differently

What Freight Insurance Covers (and What It Doesn’t)

Let’s be clear upfront:
Freight insurance is not “full coverage.” It is coverage based on defined accident scenarios.

Most standard cargo insurance policies typically cover:

• Physical damage caused by transportation accidents (impact, crushing, water ingress)
• Partial or total loss of goods during transit
• Major incidents such as vessel accidents, fires, or severe weather events

However, the most common claim denials usually involve:

• Packaging that does not meet shipping or Amazon FBA standards
• Product defects or manufacturing issues (not transport-related)
• Indirect losses such as delays, stockouts, or lost Amazon rankings
• Failure to document damage immediately with photos and reports

There’s an old saying in the logistics industry:

Insurance companies don’t look for reasons to pay —
       they look for reasons not to.

That’s not cynicism. It’s how claims actually work.

Freight Insurance vs. Freight Forwarder Liability (The Most Common Mistake)

Many importers assume:

“I hired a freight forwarder. They have insurance. If something goes wrong, they’ll cover it.”

This assumption is wrong — and often expensive.

Here’s the reality:

• Freight forwarders carry liability insurance, not cargo insurance
• That insurance protects the forwarder, not your goods
• It only applies if the forwarder is legally proven to be negligent

In most damage scenarios — rough handling, container shifts, carrier issues —
the forwarder is not financially responsible for your cargo.

If you did not purchase separate freight insurance, the loss is usually yours.This distinction becomes even more critical for high-value or bulk shipments, where liability limits are far lower than actual cargo value — a risk structure explained in cargo insurance for B2B imports from China.

Who Bears Risk at Each Stage of Shipping

To understand freight insurance, you have to understand risk transfer.

In a typical China-to-overseas import flow, risk shifts across several stages:

• Factory to Port of Loading

Responsibility depends on Incoterms and contract terms.

• International Transit (Ocean or Air)

This is where most serious damage occurs — and where insurance matters most.

• Customs Clearance and Domestic Delivery

Delays, inspections, and handling damage are common.

• Warehouse or Amazon FBA Receiving

Responsibility becomes fragmented, and disputes increase.

This is why Amazon sellers and traditional B2B importers face very different insurance realities.

In Amazon FBA shipments, responsibility often shifts after delivery, making reimbursement and claims far more complex — a breakdown explained in freight insurance for Amazon FBA shipments: who pays when goods are damaged.

Common Freight Insurance Claim Scenarios

Based on real-world cases, the most frequent claim situations include:

• Ocean containers taking on moisture with no visible exterior damage(Moisture damage inside containers with no visible exterior issues)
• Amazon rejecting inventory as “damaged during transportation”
• Pallets collapsing during air or sea transit
• DDP shipments arriving damaged with no clear party accepting responsibility(Partial loss during consolidation or transshipment)

Important note:
Not every damage scenario is automatically covered.

Successful claims depend on three things:

• The type of insurance purchased
• Whether the incident falls within the coverage scope
• Whether a complete evidence trail exists

In short,Claims succeed or fail based on policy wording, inspection timing, and evidence quality — not on whether damage is obvious.

When Freight Insurance Is Not Optional

Skipping freight insurance may seem harmless — until it isn’t.

Insurance becomes essential when:

• Shipment value is high enough to impact cash flow
• Goods are shipped to Amazon FBA, where responsibility is fragmented
• DDP shipping is used without clearly defined insurance terms
• Ocean freight is involved, with long and uncontrollable transit times

DDP shipping is especially risky when insurance assumptions are wrong.

DDP shipping is especially risky when buyers assume insurance is included by default — an assumption that causes many disputes, as explained in does DDP shipping include insurance? (most importers get this wrong).

How Much Freight Insurance Actually Costs

Most importers who skip insurance do so for one reason:

“It feels expensive.”

In reality:

• Standard freight insurance usually costs 0.3%–0.6% of cargo value
• Compared to a full or partial shipment loss, the cost is negligible

What becomes expensive is discovering — too late —
that no party is legally required to compensate you.

How to Reduce Claim Disputes Before They Happen

Successful insurance claims are prepared before shipping, not after damage is found.

Before goods leave the factory, importers should:

• Confirm in writing whether independent freight insurance is in place
• Verify insurance type (All Risk vs. Limited Coverage)
• Require photos of packaging, palletizing, and container loading
• Retain invoices, packing lists, and bills of lading
• Inspect goods immediately upon arrival and document any damage

These steps matter more than which insurance company you choose.

Summary: Freight Insurance Is Risk Management, Not a Checkbox

Freight insurance is not about expecting problems.
It’s about planning for accountability.

Experienced importers don’t ask if something might go wrong.
They ask:

If it does, do I already know who pays — and why?

That clarity is what separates controlled logistics from costly surprises.