What does cargo insurance cover?

Cargo insurance covers physical loss of or damage to goods in transit, including collision, overturn, fire, theft and, on broad forms, other accidental damage. Motor truck cargo insures a carrier's legal liability for goods of others. Shipper's transit cover insures the owner's goods for an agreed value. Both are subject to excluded commodities, security conditions and the policy's per-vehicle limit.

What is the difference between motor truck cargo and shipper's cargo insurance?

Motor truck cargo is bought by carriers and pays what the carrier is legally liable for, which is capped by law and the contract of carriage. Shipper's transit or inland marine cover is bought by the goods' owner and pays the goods' insured value, even when the carrier isn't liable at all. Shippers of valuable goods usually need their own cover.

How much is a carrier liable for if my goods are lost in Ontario?

Under Ontario's uniform conditions of carriage for general freight, the carrier is liable for the lesser of the goods' value at shipment and $4.41 per kilogram of total shipment weight, unless a higher value is declared on the contract of carriage. The carrier is not liable at all for causes such as an act of God or inherent vice.

Is cargo insurance mandatory?

For most for-hire carriers in Ontario, yes. The province's carriage of goods regulation requires each vehicle carrying goods for compensation to carry insurance for loss or damage to the goods, with an Ontario-licensed insurer. Some cargo is exempt, such as road-construction materials, iron, steel, coal and rough lumber. Shippers insuring their own goods are not legally required to.

Does my truck insurance cover the load?

No. A commercial auto or truck policy covers the vehicle and your liability to others on the road. It does not cover the freight on board. Carriers need motor truck cargo, and businesses moving their own goods need transit cover, either on a separate policy or as an extension of their property policy.

Is reefer breakdown covered by a standard cargo policy?

Usually not. Most cargo forms exclude spoilage caused by mechanical or refrigeration failure unless you add reefer breakdown coverage. That endorsement typically requires a sudden and accidental breakdown, has its own deductible, and may exclude wrong temperature settings. Keep temperature downloads and unit maintenance records, because the claim will turn on them.

Why was my cargo theft claim denied?

Theft claims are most often denied for breaching a policy condition, such as leaving a loaded trailer unattended outside a secure location, missing alarm or tracking requirements, or hauling an excluded high-theft commodity. Fraudulent pickups by fake carriers can also fall outside theft cover. Reading the conditions against your routes before a loss is the fix.

How should I set my cargo limit?

Set the per-vehicle limit from the most valuable load you carry, not the average, and check any limit your shipper or broker contracts require. Add a terminal limit for goods held in your yard and consider a catastrophe limit for several loads lost in one event. For an unusually valuable shipment, arrange a temporary increase before it moves.

Does cargo insurance cover shipments into the United States?

Many Canadian cargo forms cover Canada and the continental United States, but you should confirm the territory on your policy before the first cross-border load. Carriers running interstate in the United States also need U.S. auto liability filings. Importers and exporters using ocean or air freight usually need a marine cargo policy instead.

What does cargo insurance cost?

It depends on the commodities, their value and theft appeal, the limits you need, your lanes and radius, security measures, refrigeration and your loss history. Carriers usually pay per power unit. Shippers often pay on declared shipments or sales. A complete submission with commodity lists and load values produces the most accurate quotes.

Cargo Insurance

The carrier's liability has a cap. Cargo insurance covers the value of the load, whichever side of the bill of lading you're on.

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In short

Cargo insurance pays for physical loss of or damage to goods while they are being transported. It comes in two main forms. Motor truck cargo insures a carrier's legal liability for freight it hauls for others. Shipper's transit or inland marine cover insures the owner's own goods for their value, whatever the carrier is liable for. Policies cover theft, collision, overturn, fire and loading damage, subject to commodity, refrigeration and security conditions.

Last reviewed October 26, 2026

Canadian insurers we compare for business insurance programs: 17; Canadian insurers we compare for business insurance programs
Default carrier liability cap for general freight under Ontario's conditions of carriage: $4.41/kg; Default carrier liability cap for general freight under Ontario's conditions of carriage
Air cargo liability limit under the Montreal Convention since December 28, 2024 (ICAO): 26 SDR/kg; Air cargo liability limit under the Montreal Convention since December 28, 2024 (ICAO)
Share of stolen cargo recovered in Canada in 2025, down from 13% (Équité Association): 9%; Share of stolen cargo recovered in Canada in 2025, down from 13% (Équité Association)

Cargo insurance covers goods while they move by truck, courier, rail, sea or air. Carriers buy motor truck cargo to insure their legal liability for freight they haul for others, which is mandatory for most for-hire carriers in Ontario. Shippers buy transit cover on their own goods, because a carrier's liability is capped by law and often far below what the load is worth. Carriers can find the full program in our transportation and logistics guide.

Cargo claims rarely fail because there was no policy. They fail on an excluded commodity, an unattended vehicle condition, a reefer breakdown nobody insured, or a per-vehicle limit set below the highest-value load. We write cargo around what you actually move, and coordinate it with your commercial truck policy and any cross-border lanes.

What's covered

Motor truck cargo for carriers' legal liability for freight
Shipper's transit cover on your own goods, at agreed value
Theft of loads and trailers, subject to security conditions
Collision, overturn, fire and loading or unloading damage
Reefer breakdown and spoilage for temperature-controlled loads
Terminal and temporary storage limits during transit
Contingent cargo for freight brokers and forwarders
Marine cargo for imports and exports, warehouse to warehouse

What cargo insurance covers

Cargo insurance covers goods while they move, and usually while they sit briefly in the ordinary course of transit. Your auto policy does not cover the freight. A commercial truck or fleet policy insures the vehicle and road liability, so the load needs its own cover.

Road perils: collision, overturn, upset and jackknife, plus fire and explosion on the vehicle.
Theft of the entire load, or of the trailer with the load, usually subject to security conditions.
Loading and unloading damage, where the form includes it.
Water, weather and bridge or culvert collapse on broad forms.
Debris removal, sue and labour costs to protect the goods after a loss, and freight charges that become uncollectable.
Temporary storage at a terminal or in a trailer, usually for a set number of days.

Cargo insurance does not cover poor packing, inherent vice such as spoilage or natural shrinkage, delay and loss of market, or ordinary wear. Goods at your own premises belong on your business contents or commercial property policy, and contractors' tools on a tools and equipment floater.

Motor truck cargo vs. shipper's transit cover

The first question is which side of the bill of lading you are on. A carrier is liable for freight in its care, but only to the extent the law and the contract of carriage say. An owner of goods has a different risk: losing the value of the goods, whoever caused the loss.

The main forms of cargo cover and who buys each
	Motor truck cargo	Shipper's transit (inland marine)	Marine cargo (ocean and air)
Who buys it	For-hire carriers and owner-operators with their own authority	Manufacturers, wholesalers, retailers and contractors moving their own goods	Importers and exporters
What it insures	The carrier's legal liability for goods of others	The owner's goods, for their insured value	The owner's goods on international voyages, usually warehouse to warehouse
Pays up to	What the carrier is legally liable for, within the policy limit	The agreed valuation, often invoice value plus freight	The agreed valuation, often invoice plus a percentage
Responds when the carrier isn't liable	No	Yes, subject to the policy terms	Yes, subject to the policy terms
Typical vehicles	Tractor-trailers, straight trucks, courier vans	The owner's own trucks, common carriers, couriers	Ships, aircraft, and connecting road legs

Many businesses need both. A distributor with its own delivery trucks needs transit cover on its goods. If it also hauls for others for pay, it is a carrier for those loads and needs motor truck cargo. Freight brokers need contingent cargo, which the transportation and logistics guide explains.

Who needs cargo insurance

For-hire trucking carriers. In Ontario, carrying goods for compensation without cargo insurance breaches a regulation, not just good practice.
Couriers, last-mile delivery and household goods movers, whose loads change many times a day.
Manufacturers and wholesalers shipping finished goods to customers or pulling raw materials in.
Online sellers with high-value outbound volume. See ecommerce insurance.
Contractors carrying materials and equipment to sites.
Importers and exporters, whose goods cross several carriers and modes before delivery.

Why the carrier's liability is not your insurance

Shippers often assume the carrier will pay for damaged freight. The carrier usually will, but only up to a cap set by law, and only for causes it is liable for. That cap is often far below the value of high-value, lightweight goods.

Default carrier liability limits by mode (unless a higher value is declared)
Mode	Rule	Default limit
Road, Ontario general freight	O. Reg. 643/05, Schedule 1, uniform conditions of carriage	Lesser of the goods' value at shipment and $4.41 per kg of total shipment weight
Ocean, under a bill of lading	Hague-Visby Rules, given force of law by the Marine Liability Act	666.67 SDR per package or unit, or 2 SDR per kg of gross weight, whichever is higher
International air	Montreal Convention, given force of law by the Carriage by Air Act	26 SDR per kg for loss, damage or delay, effective December 28, 2024

Each regime also lists causes the carrier is not liable for at all. Ontario's general freight conditions exclude loss caused by an act of God, riots, strikes, a defect or inherent vice in the goods, or an act or default of the consignor, owner or consignee. In those cases the shipper recovers nothing from the carrier.

Declaring a value changes the picture. Under Ontario's conditions, a value declared on the face of the contract of carriage becomes the carrier's liability limit, and the carrier may charge more for it. Other provinces set their own conditions of carriage, so check the rules where the contract is made. Carriers can read the full Ontario rules, including the mandatory cargo insurance requirement and the exempt commodities, in our transportation and logistics guide.

How a cargo policy actually works

Limit per vehicle or per conveyance: the most the policy pays for any one load. Set it from the highest-value load you carry, not the average.
Limit per location or terminal: a separate, usually higher limit for goods sitting in a terminal or yard.
Catastrophe limit: the most payable for one event involving several loads, such as a terminal fire.
Valuation: motor truck cargo pays the carrier's legal liability. Transit cover pays an agreed basis, commonly invoice cost plus freight, or selling price for sold goods.
Named perils or broad form: named perils covers only listed causes such as collision, fire and theft. Broad form covers all physical loss unless excluded, and puts the burden on the insurer to show an exclusion applies.
Scheduled or blanket: a scheduled policy lists vehicles and drivers; a blanket or reporting form adjusts the premium on declared revenue or shipments.
Deductible: a flat amount per occurrence, often higher for theft and reefer claims.
Territory: many Canadian cargo forms cover Canada and the continental United States, but not all. Confirm it before your first cross-border load, and see cross-border insurance.

Common exclusions, and how to close the gaps

Most denied cargo claims are not uninsured events. They fail on a condition or exclusion that didn't fit what the business actually hauls.

Typical cargo exclusions and limitations, and the fix for each
Excluded or limited	How to close the gap
Excluded commodities, often electronics, alcohol, tobacco, pharmaceuticals, metals or live animals	Declare every commodity at application and place the risk with a market that writes it knowingly
Unattended vehicle theft	Meet the stated security conditions, such as locked and alarmed units or a secure yard, or negotiate the wording
Mechanical or refrigeration breakdown	Add a reefer breakdown endorsement and keep temperature logs
Spoilage from delay or inherent vice	Usually uninsurable; reduce the risk with routing and temperature controls
Loads above the per-vehicle limit	Raise the limit, or arrange a one-off increase before the shipment
Goods of others at your premises	Warehouse legal liability; see warehousing insurance
Employee or impostor theft of a load	Commercial crime cover, including social engineering where offered
Pollution clean-up after a spill	Separate pollution or environmental cover; your commercial truck policy may respond to third-party damage

Refrigerated loads and reefer breakdown

Standard cargo forms usually exclude spoilage caused by a refrigeration unit failing. Reefer breakdown coverage buys that back, typically for sudden and accidental breakdown of the unit, often with a minimum duration of failure and its own deductible.

Insurers will ask for evidence. Keep downloaded temperature records, pre-trip unit inspections, fuel logs and maintenance records. Many reefer claims turn on whether the unit failed or was set to the wrong temperature, and the second is often excluded as an error. Food and pharmaceutical shippers should also match their own temperature requirements to the bill of lading.

Cargo theft

Theft is the cargo loss that has grown fastest. Équité Association estimates about 970 trailer thefts across Canada in 2025, up from about 570 in 2024, and only 9% of stolen cargo was recovered, down from 13%. Grocery items, automotive parts and building materials, including copper and other metals, were the most targeted commodities, according to Truck News.

Insurers respond with conditions, not just rates. Expect questions about secure parking, king-pin and glad-hand locks, GPS tracking, driver vetting and how you confirm the identity of anyone picking up a load. Fictitious pickups, where a fraudster poses as a legitimate carrier, may not be covered as theft under some cargo forms. Our post on cargo cover in peak shipping season covers the busy fourth quarter.

A worked example (hypothetical)

An Ottawa electronics distributor ships 2,000 kg of laptops worth $300,000 to a customer in Toronto with a for-hire carrier. No value is declared on the bill of lading. The trailer is stolen from a truck stop overnight.

Under Ontario's uniform conditions, the carrier's liability is the lesser of the goods' value and $4.41 per kg. That works out to $8,820. The carrier's cargo insurer pays the carrier's liability, and no more. The distributor absorbs the remaining $291,180 unless it insured the goods itself.

With a shipper's transit policy valued at invoice cost, the distributor's own insurer pays the $300,000, less the deductible, and then pursues the carrier for its share through subrogation. Declaring the value on the bill of lading would also have raised the carrier's liability, at a higher freight rate.

What cargo insurance costs

There is no standard price, because cargo is rated on what moves, how and where. Underwriters look at:

Commodities: their value, theft appeal and fragility. A load of lumber rates very differently from pharmaceuticals.
Limits: the per-vehicle, terminal and catastrophe limits you need.
Radius and lanes: local, regional, long-haul or cross-border, and the theft profile of the routes and stops.
Security: tracking, locks, secure yards and driver procedures.
Refrigeration: whether reefer breakdown is needed and how units are maintained.
Loss history and, for carriers, the operator's safety record. Our post on trucking insurance and your CVOR explains how the record feeds the rate.

Carriers usually pay a premium per power unit. Shippers on an annual transit policy often pay on declared shipments or sales. The wider market is easing: Marsh put overall Canadian commercial rates down 6% in the third quarter of 2026, but cargo pricing still turns on commodity and theft experience.

How we place cargo insurance

1Position: we confirm whether you are a carrier, a shipper, a broker or all three, and which loads fall into each role.
2Contracts: we read your bills of lading, shipper contracts and broker agreements for declared value, liability and limit requirements.
3Commodities and values: we list every commodity, the highest-value load and peak terminal exposure.
4Marketing: we take the risk to insurers on our panel of 17 whose appetite fits your freight and lanes.
5Comparison: we set out limits, deductibles, excluded commodities, theft conditions and reefer terms side by side.
6Upkeep: we issue certificates of insurance, adjust limits for unusual loads and review the program each year.

If a load is lost or damaged

1Report theft to police immediately and get a report number.
2Note exceptions on the delivery receipt before signing, and photograph the load, seals and packaging.
3Protect the goods from further damage and keep damaged items until the adjuster has seen them.
4Give written notice to the carrier promptly. Under Ontario's general freight conditions, notice is due within 60 days after delivery, or within nine months after shipment if the goods never arrived.
5Notify your broker and insurer with the bill of lading, invoices, packing list and temperature records.

Our claims team works with you, the carrier and the adjuster.

Good to know

Frequently asked questions

What does cargo insurance cover?: Cargo insurance covers physical loss of or damage to goods in transit, including collision, overturn, fire, theft and, on broad forms, other accidental damage. Motor truck cargo insures a carrier's legal liability for goods of others. Shipper's transit cover insures the owner's goods for an agreed value. Both are subject to excluded commodities, security conditions and the policy's per-vehicle limit.
What is the difference between motor truck cargo and shipper's cargo insurance?: Motor truck cargo is bought by carriers and pays what the carrier is legally liable for, which is capped by law and the contract of carriage. Shipper's transit or inland marine cover is bought by the goods' owner and pays the goods' insured value, even when the carrier isn't liable at all. Shippers of valuable goods usually need their own cover.
How much is a carrier liable for if my goods are lost in Ontario?: Under Ontario's uniform conditions of carriage for general freight, the carrier is liable for the lesser of the goods' value at shipment and $4.41 per kilogram of total shipment weight, unless a higher value is declared on the contract of carriage. The carrier is not liable at all for causes such as an act of God or inherent vice.
Is cargo insurance mandatory?: For most for-hire carriers in Ontario, yes. The province's carriage of goods regulation requires each vehicle carrying goods for compensation to carry insurance for loss or damage to the goods, with an Ontario-licensed insurer. Some cargo is exempt, such as road-construction materials, iron, steel, coal and rough lumber. Shippers insuring their own goods are not legally required to.
Does my truck insurance cover the load?: No. A commercial auto or truck policy covers the vehicle and your liability to others on the road. It does not cover the freight on board. Carriers need motor truck cargo, and businesses moving their own goods need transit cover, either on a separate policy or as an extension of their property policy.
Is reefer breakdown covered by a standard cargo policy?: Usually not. Most cargo forms exclude spoilage caused by mechanical or refrigeration failure unless you add reefer breakdown coverage. That endorsement typically requires a sudden and accidental breakdown, has its own deductible, and may exclude wrong temperature settings. Keep temperature downloads and unit maintenance records, because the claim will turn on them.
Why was my cargo theft claim denied?: Theft claims are most often denied for breaching a policy condition, such as leaving a loaded trailer unattended outside a secure location, missing alarm or tracking requirements, or hauling an excluded high-theft commodity. Fraudulent pickups by fake carriers can also fall outside theft cover. Reading the conditions against your routes before a loss is the fix.
How should I set my cargo limit?: Set the per-vehicle limit from the most valuable load you carry, not the average, and check any limit your shipper or broker contracts require. Add a terminal limit for goods held in your yard and consider a catastrophe limit for several loads lost in one event. For an unusually valuable shipment, arrange a temporary increase before it moves.
Does cargo insurance cover shipments into the United States?: Many Canadian cargo forms cover Canada and the continental United States, but you should confirm the territory on your policy before the first cross-border load. Carriers running interstate in the United States also need U.S. auto liability filings. Importers and exporters using ocean or air freight usually need a marine cargo policy instead.
What does cargo insurance cost?: It depends on the commodities, their value and theft appeal, the limits you need, your lanes and radius, security measures, refrigeration and your loss history. Carriers usually pay per power unit. Shippers often pay on declared shipments or sales. A complete submission with commodity lists and load values produces the most accurate quotes.

Sources

O. Reg. 643/05: Carriage of Goods, under the Highway Traffic Act (cargo insurance requirement, $4.41/kg limit, declared value, exceptions from liability, notice of claim). Government of Ontario, e-Laws, Consolidated from December 31, 2025.
Marine Liability Act, S.C. 2001, c. 6, s. 43 and Schedule 3 (Hague-Visby Rules, Article IV limits). Government of Canada, Justice Laws, Current to September 30, 2026.
Carriage by Air Act, R.S.C. 1985, c. C-26, s. 2(2.1) and Schedule VI (Montreal Convention). Government of Canada, Justice Laws, Current to September 30, 2026.
Montreal Convention 1999: revised limits of liability effective December 28, 2024 (cargo 26 SDR per kilogramme). International Civil Aviation Organization, November 2024.
Canada's trailer theft nearly doubles as cargo losses go underreported in 2025 (Équité Association data). Truck News, February 23, 2026.
Canada commercial insurance rates fall for third straight year (Marsh Global Insurance Market Index, Q3 2026). Insurance Business Canada, October 21, 2026.

This page is general information, not insurance or legal advice. Coverage depends on your policy wording and the insurer. Speak with a licensed broker about your situation.

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