Approximately 90% of the world’s goods move by ocean freight, but with this reliance on ocean freight comes risk. Cargo at sea is exposed to a range of natural hazards, human error, accidents, piracy, geopolitical conflicts, and increasingly complex global trade dynamics. For shippers that rely on ocean freight, insurance is a critical safeguard against unpredictable losses.
Recent events, ranging from tariff-driven value increases to container collapses and geopolitical crises, underscore the importance of adequate ocean freight insurance coverage for cargo owners, shippers, and logistics stakeholders.
We understand these risks and work closely with clients to ensure shipments are protected and supply chains remain resilient, even in unpredictable conditions.
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Rising Tariffs and Effects on Cargo Values
Among the factors shaping insurance requirements today is the impact of rising tariffs. The United States, the world’s largest importer, brought in $4.1 trillion worth of goods in 2024. Higher tariffs have directly increased the declared value of imported goods, pushing up landed costs and requiring adjustments to coverage limits.
For example, a shipment of electronics that was once insured for $5 million may now require $6.5 million in coverage after tariff-related costs are factored in. Without adjusting insured values to reflect these changes, shippers risk being underinsured if their cargo is damaged, lost, or stolen.
As a certified NVOCC, we help clients adjust coverage limits to match actual shipment values, ensuring protection even in volatile markets.
Additionally, tariffs, along with shifting trade alliances, labor shortages, and the front-loading of cargo during seasonal peaks, such as the Lunar New Year, contribute to cargo accumulation in ports and warehouses.
As shipments concentrate in fewer locations, risk accumulations grow, meaning a single catastrophic event, such as a fire, flood, or labor strike, could result in massive losses. Our team evaluates cargo flows and coverage requirements to mitigate these risks and keep shipments moving safely.
Geopolitical Risk and Volatility
While tariffs reshape trade economics, geopolitical tensions reshape physical shipping risks. The Red Sea, for example, has seen insurance costs more than double following attacks on vessels by Houthi militants. Shipping traffic has declined through this route as carriers divert vessels around Africa, lengthening transit times and increasing costs.
Without comprehensive freight insurance, shippers risk major losses if their shipments are caught in such flashpoints. But with our years of experience in global logistics, we help clients navigate high-risk regions, anticipate disruptions, and minimize unexpected costs.
Emerging Threats: Shadow Fleets, Fires, and Cyber Risks
Traditional risks, such as collisions, groundings, and weather, remain concerns, but the modern maritime sector also faces new and evolving threats. A major one is the growth of the “shadow fleet”, tankers operating outside international regulation, often transporting sanctioned oil. According to financial services and insurance firm Allianz, as much as 20% of the world’s crude oil tanker fleet now falls into this category. These vessels typically lack proper maintenance and oversight, making them highly vulnerable to accidents and spills. Cleanup costs from a single major shadow fleet spill could reach $1.6 billion, according to Allianz estimates. Legitimate cargo owners may face collateral damage from such incidents, underscoring the need for adequate insurance protection.
Another danger is fire. In 2024, Allianz estimates that there were 250 vessel fires, the highest level in a decade, with seven total losses attributed to fires. Many of these were caused by mis-declared cargo, particularly hazardous items such as lithium-ion batteries. Despite regulatory efforts to improve cargo declaration standards, the risk of fire persists as modern supply chains handle an increasing number of complex goods. We work with clients to improve cargo handling and declaration processes, reducing exposure to fire-related incidents.
Allianz also estimates that ransomware attacks accounted for more than half of large maritime cyber claims in 2024, while GPS spoofing and jamming incidents rose 40% year over year. These disruptions threaten navigational accuracy and vessel safety, raising the stakes for shippers who depend on precise schedules and safe passage. Insurance solutions are evolving to cover such emerging risks, but only companies that prioritize adequate coverage can avoid devastating consequences.
Why Coverage Matters
Recent incidents demonstrate the financial and operational stakes. In 2024, Zurich American Insurance Company sued Mediterranean Shipping Company (MSC) after containers fell overboard off the coast of South Africa. Zurich had indemnified its clients for the losses and sought to recover costs from the carrier, alleging negligence. The case highlights how accidents at sea frequently give rise to complex legal disputes, leaving insurers as vital intermediaries to ensure cargo owners are made whole.
More recently, in September 2025, the ZIM-chartered vessel Mississippi suffered the loss of several containers at the Port of Long Beach. Over 60 containers fell into the water, and dozens more were damaged. Salvage operations continue, with cargo owners awaiting confirmation of whether their goods survived. For affected shippers, having insurance determines whether they face an operational headache or a financial disaster.
Complicating matters further, carriers, such as ZIM, may declare General Average, a maritime law principle requiring all cargo owners to share the costs of salvaging a vessel. To date, ZIM has not declared General Average over the Long Beach incident; however, if it does, shippers without proper insurance may be required to post significant collateral before their undamaged cargo can be released. For insured shippers, however, insurers handle the paperwork and guarantees, minimizing disruption.
Why Shippers Cannot Afford to Go Without Insurance
Shippers that neglect coverage not only expose themselves to direct losses but also risk delays and additional costs. Cargo may be held at ports during investigations, delayed by salvage operations, or involved in General Average declarations.
Even during challenging times, our team develops tailored solutions that keep shipments moving and ensure clients can maintain continuity. Maintaining adequate insurance is essential for managing risk and keeping supply chains running smoothly.
Proactive planning and expert guidance help reduce delays, costs, and unexpected financial burdens.
Protect What Moves Your Business
In an unpredictable trade environment, the right coverage can make all the difference. Connect with our experts to safeguard your cargo and maintain uninterrupted supply chain performance.