Indonesia’s trade and logistics industry continues to experience rapid growth, particularly in the final quarters leading up to 2025. Increased exports and imports, inter-island distribution, and e-commerce are driving higher freight flows. Amidst this dynamic, Marine Cargo (MC) insurance has become a crucial requirement for both large companies and individuals engaged in high-value shipments.
One of the most frequently asked questions from both businesses and individuals is, “How much does a marine cargo insurance premium cost?” This is understandable, as the premium affects profit margins, distribution efficiency, and the security of your investment in every shipment.
However, Marine Cargo insurance premium rates are not uniform.The cost is influenced by many factors, ranging from the type of goods transported, the travel route, the type of transportation, to the type of policy (ICC A, B, or C) selected. Therefore, understanding how premiums are calculated and their determining factors is a strategic step before arranging insurance coverage.
This article will comprehensively discuss the risks faced in shipping goods, examples of real accidents, types of Marine Cargo policies, premium determinants, premium estimation simulations, and the important role of insurance brokers such as L&G in providing the best solutions.
Contact L&G Insurance Broker now at 08118507773 for a free consultation before the risks haunt your business.
Risks Faced in the Transport of Goods
Shipping goods by sea, air, or land always carries a high level of risk. Despite advances in transportation technology, accidents and losses are still unavoidable. This is the primary reason why Marine Cargo (MC) insurance is a vital element in every trade transaction.
Some of the main risks in the transport of goods include:
- Natural Perils
- High waves, tropical storms, or earthquakes can cause ships to capsize or damage cargo.
- The risk of extreme weather in Indonesia is quite high because it is located on the Ring of Fire and is prone to disasters.
- Transportation Accident Risk
- Fires or explosions on ships, collisions between ships, ships running aground, and even plane crashes.
- In land transportation, truck accidents, rollovers, or pile-ups also frequently occur.
- Risk of Theft & Robbery
- High-value goods such as electronics, jewelry, or textiles are often targets of theft at ports, warehouses, and during land distribution.
- Human Risk (Human Error & Negligence)
- Errors during loading and unloading, mishandling of fragile goods, and drivers who are negligent during the trip.
- Risk of War & Unrest (Political Risk)
On some international routes, the risk of war, embargoes, or piracy remains a serious threat.
The losses resulting from these risks can be significant, even wiping out the entire profit from the transaction. Therefore, marine cargo insurance coverage is not merely an option, but an absolute necessity to protect the value of goods during transit.
Examples of Accidents in Shipping Goods
To understand the importance of Marine Cargo insurance protection, let’s look at some real examples of accidents in shipping goods:
- Ship Sinks in Indonesian Waters
In recent years, several cargo vessels in Indonesian waters have experienced accidents due to extreme weather. For example, a ship carrying heavy equipment from Kalimantan to Java suffered a hull leak and sank. Its entire cargo, worth tens of billions of rupiah, was lost in an instant. Without insurance, the owner of the goods would have borne the entire loss.
- Fire on a Container Ship
One high-profile international case was the massive fire on the container ship Maersk Honam in 2018. Thousands of containers containing high-value goods were damaged by the fire and fire extinguishers, causing losses in the hundreds of millions of dollars. This case serves as a reminder that even the largest shipping companies are not immune to significant risks.
- Goods Transport Truck Overturns
On land routes, trucks carrying goods often overturn due to overloading or poor road conditions. For example, a truck carrying pharmaceutical products worth billions of rupiah overturned on the Trans-Java toll road. Most of the drugs were damaged and unusable.
The examples above demonstrate that shipping accidents can happen anytime and anywhere. Even experienced companies cannot completely eliminate the risk.
With Marine Cargo insurance, goods owners can transfer the risk of financial loss to the insurance company, so that their business remains protected and stable.
Types of Marine Cargo Insurance Policies
In international practice, marine cargo insurance typically refers to the Institute Cargo Clauses (ICC) issued by the Institute of London Underwriters. These policies are divided into three main categories: ICC (A), ICC (B), and ICC (C). Each has a different level of protection and premium amount.
- Polis ICC (A) – All Risks
It is the broadest protection because it covers almost all risks that may occur during the trip, except for risks that are explicitly excluded (for example, losses due to deliberate acts, war, or radioactivity).
Suitable for high-value or perishable goods, such as electronics, machinery, pharmaceuticals, or strategic import-export goods.
Premiums are generally higher than other policies because the risk coverage is broad.
- Polis ICC (B) – Named Perils
Covers certain risks that are clearly stated, such as fire, explosion, ship running aground, sinking, earthquake, volcanic eruption, and sea water/rain water entering the ship.
Does not cover minor damage, partial loss, or theft risks.
Cheaper than an ICC(A) policy, but with limited coverage. Suitable for medium-risk items.
- Polis ICC (C) – Basic Cover
Provides the most basic protection, usually only covering major losses due to fire, ship collision, sinking, or capsizing.
Does not cover minor losses, weather damage, or theft.
Premiums are lower, but are only recommended for items that are relatively risk-resistant or have a lower value.
- Extensions
In addition to the three main clauses, the Marine Cargo policy can be extended with additional coverage, such as:
- War & Strike Risks: covers risks resulting from war, riots, labor strikes, or sabotage.
- Storage Coverage: covers goods while they are temporarily stored in a port warehouse.
- Door to Door Coverage: covers goods from the shipper’s warehouse to the recipient’s warehouse, not just on board the ship.
By understanding the differences between these types of policies, property owners can choose the protection that best suits the value of the goods, the transportation route, and their risk profile.
Factors Affecting Marine Cargo Insurance Premium Rates
Many companies and individuals frequently ask, “How much does a marine cargo insurance premium actually cost?” There’s no single answer, as premiums are heavily influenced by various risk factors related to the type of goods, the route, and the mode of transportation used. Here are the main factors:
- Type of Goods (Cargo Nature)
Fragile goods, electronics, pharmaceuticals, or chemicals usually incur higher premiums because they are susceptible to damage.
Mining goods, coal, or bulk products are usually more stable, but still at risk if exposed to sea water or fire.
- Value of Goods (Sum Insured)
The higher the value of the insured item, the higher the premium that must be paid.
Policies usually calculate the value of the goods plus freight costs, import duties, and a profit margin (CIF + 10%).
- Types of Transportation Modes
- Sea vessels: risk of sinking, collision, extreme weather.
- Airplane: lower risk, but relatively higher premium.
- Land trucks: risk of traffic accidents, theft or robbery.
- Travel Route
High-risk routes (e.g., through pirate-prone waters or ports with a high theft record) will increase premiums.
Domestic routes are relatively cheaper than international ones, especially those involving conflict-prone countries.
- Selected Policy Type (ICC A, B, C)
- ICC (A) → highest premium because it covers almost all risks.
- ICC (B) → medium premium, covers certain risks only.
- ICC (C) → lowest premium, most basic protection.
- Packaging & Handling Conditions
Well-packaged goods (wooden crates, containers, special wrapping) tend to be safer and receive lower premium rates.
Bulk cargo or goods without special packaging are at higher risk.
- Sender & Carrier Track Record
Logistics or shipping companies with a good reputation can lower premium rates.
On the other hand, older ships or shipping companies with a history of accidents increase premiums.
By considering the above factors, insurance companies can assess how much risk they should cover. This is where insurance brokers like L&G play a crucial role, as they can help clients obtain the best rates without compromising on the quality of coverage.
Marine Cargo Insurance Premium Estimate
After understanding the factors that influence rates, the next question is: “What is the range of Marine Cargo insurance premiums that must be paid?” While each insurance company has its own calculation method, here are general estimates in the Indonesian market that can be used as a reference:
- Based on Cover Type (ICC A, B, C)
- ICC (A) – All Risks: 0,05% – 0,2% of the value of the goods (CIF + 10%).
Suitable for high value items, electronics, or industrial machinery.
- ICC (B) – Named Perils: 0.03% – 0.1% of the value of the goods.
Generally used for manufactured products or goods with a medium risk level.
- ICC (C) – Basic Cover: 0.01% – 0.05% of the value of the goods.
Used for risk-resistant goods, such as building materials, metals, or bulk goods.
- Based on Mode of Transportation
- Sea Freight: Premiums are relatively cheap (0.02% – 0.2%) but are highly dependent on the age of the vessel and the route.
- Air Freight: Premiums are higher (0.1% – 0.3%) because the value of the goods is usually high and claims can be large.
- Land (Truck/Rail): 0.05% – 0.15%, with additional risk of theft and accidents.
- Based on Cargo Type
- Electronics & Precision Machinery: 0.1% – 0.25% → due to their vulnerability to shock damage.
- Pharmaceutical Products & Perishable Food: 0.15% – 0.3% → requires special protection (cold chain).
- Bulk Goods (coal, CPO, cement, metal): 0.02% – 0.08% → low unit value, risk of depreciation.
- General cargo: 0.03% – 0.1%.
Example of Calculation Illustration
Value of electronic goods = USD 1,000,000 (CIF + 10%).
Using ICC cover (A) with a premium of 0.1%.
Premium = USD 1,000 (approximately Rp. 15,000,000).
The above estimates illustrate that marine cargo insurance premiums are relatively small compared to the potential total loss due to an accident. With premiums of just 0.05%–0.2% of the value of the goods, cargo owners can protect investments worth billions of rupiah.
Why It Is Important to Use Insurance Broker Services
Many goods owners or logistics companies are still unsure whether they need to use an insurance broker. In practice, however, brokers play a crucial role in ensuring optimal protection at cost-effective premiums.
- Access to Many Insurance Companies
Insurance brokers collaborate with various national and international insurance companies. This allows them to compare premiums and coverage offerings and then select the best option for their clients’ needs.
- More Accurate Risk Analysis
Each cargo has different characteristics. Experienced brokers like L&G Insurance Broker can analyze the type of cargo, route, and mode of transportation to determine the most appropriate policy type, whether ICC (A), (B), or (C).
- More Competitive Premium Negotiations
Due to their large business volume, brokers have greater bargaining power than individual clients. This allows clients to obtain lower premiums with broader coverage.
- Claims Assistance
The claims process is often complex and time-consuming. Brokers act as a facilitator, ensuring claims are processed quickly, accurately, and paid according to the insured’s rights. This is crucial, as claims often stall not because they aren’t covered, but because of inadequate documentation and procedures.
- Time and Energy Efficiency
Instead of companies spending time dealing with multiple insurance companies, simply hand it over to a broker. Everything—from policy placement and monitoring to claims—is handled professionally.
In short, an insurance broker is not just an intermediary, but a strategic partner who helps protect your business and ensures that every rupiah of premium paid provides maximum benefits.
Protect Your Shipment with L&G Insurance Broker
Risks in freight transportation are unavoidable, but they can be managed and mitigated through the right marine cargo insurance. The question is, are you sure your policy truly provides optimal protection at the most efficient premium?
This is where the role of L&G Insurance Broker becomes crucial. With extensive experience serving clients across various industries—logistics, mining, energy, manufacturing, and international trade—L&G is able to deliver targeted, competitive, and bankable insurance solutions.
From risk analysis, selecting an ICC (A), (B), or (C) policy, to negotiating the best premium and handling claims, you can entrust everything to the L&G professional team.
Don’t leave billions of rupiah worth of shipments to chance. Contact L&G Insurance Broker today and ensure every item you ship is fully protected, ensuring your business runs smoothly and without disruption.
DON’T WASTE YOUR TIME AND SECURE YOUR FINANCIAL AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773 (CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
