May 08, 2017 | Cargo Insurance, Industry Insights, Shipping

An Inside Look at Declared Value Vs. Cargo Insurance

Share This:

Shippers often mistake declared value coverage with Cargo insurance, but in fact they are quite different. It is important to understand these differences and how claims are paid under each type of policy. Following is a brief overview of how these policies work.

The practice of declaring a value for carriage occurs when a shipper wants the option to pursue a recovery amount that exceeds the carriers stated limits should a loss occur. Declaring a value does not increase the carriers scope of liability, it simply allows the shipper to pursue a higher recovery. Consider a scenario in which a shipper’s goods are valued at $200,000 and the chosen carrier has a stated maximum liability of $100,000. To make up for the shortfall, the shipper can declare a value of $200,000 and pay additional charges for the $100,000 increase in liability.

It’s important to note, however, that the exclusions, limitations, and terms of the bill of lading still apply and, even more importantly, in the event of a claim the shipper needs to provide evidence that the loss was caused by the carrier. Just because the shipper paid for the additional coverage doesn’t necessarily mean that any type of loss or damage that occurs while in the care, custody and control of the carrier will be fully recovered. Legal liability on the part the carrier must be proven. In addition, carriers have several established defenses with regard to cargo damage, including acts outside of their control, acts of God, and insufficient packing, among others. Take this scenario, for instance. On the way to the airport, a trucker was held at gunpoint and the cargo was stolen. The driver took no additional risks and was following his regular route. The cargo claim was denied due to the lack of contributory negligence on the part of carrier.

Now let’s take a look at Cargo insurance, which directly protects the goods on behalf of the shipper against physical loss or damage according to the policy terms. The shipper does not have to prove that the carrier is legal liable for the damage. If there is a covered claim, the shipper will be reimbursed for its full-insured value for a 100% loss or reimbursed proportionally for partial losses. Cargo insurance is clearly the better alternative for shippers, but declared value does have its place for some items such as commodities that cannot be insured for all-risk coverage.

Purchasing Cargo insurance allows shippers to eliminate gaps in coverage and protect their financial interests. Roanoke Trade specializes in providing insurance solutions to transportation and logistics providers, and will be happy to review specific coverage details with you. For information about our insurance products and services, please contact one of our Roanoke Trade professionals at 1-800-ROANOKE (800-762- 6653).

Share This:


Thank You to Karen Groff

We have important news to share with you. Karen Groff, President of Roanoke Insurance Group, has decided to leave the organization. Although our hearts are heavy with this news, we respect her decision and wish her all the best in her future endeavors. Karen played an integral role in Roanoke’s success over the past 30 […]

Corporate Communiqué, Industry Insights

Roanoke Appoints a New Regional Vice President and Head of Sales

Roanoke has appointed two key leaders to new roles, effective November 1, 2023. Please join us in congratulating Patrice Lafayette for accepting the position of Regional Vice President, Western Region, and Grant Goldsmith, who has accepted a position as Head of Sales. Patrice has been a steadfast leader of Roanoke’s Western Region for more than […]

Industry Insights

Is your Business Exposed to the Risks of Employee Distracted Driving?

The National Safety Council(NSC) recognizes April as Distracted Driving Awareness Month. They estimate that 4,000 deaths and 276,000 injuries occur yearly because of distracted driving crashes. Additionally, distracted driving is the cause of 10% of all fatal crashes. Many of these accidents and fatalities are attributed to drivers engaging in risky behavior such as cell […]

Commercial Business Insurance, Industry Insights

Sign up for our latest articles and events.

Roanoke is the leading provider of insurance and surety solutions for transportation and logistics providers. In fact, we are recognized as the most reliable source for U.S. customs bonds.


If you have any questions or need help, feel free to contact with our team.



1501 E. Woodfield Road

Suite 400W

Schaumburg, IL 60173


390 Bay Street

Munich Re Centre, 22nd Floor

Toronto, ON M5H 2Y2

Solutions that Go the Distance.

© 2024 Roanoke Insurance Group Inc. A Munich Re company

Better Business Bureau logoCoverholder at Lloyd's logo