Part 2 | Comprehensive Cargo Insurance, Packaging Requirements & Exclusions
Comprehensive Cargo Insurance (Loss & Damage Cover)
Some shipments are not at high risk of being lost, but they may be exposed to impact, pressure or accidental damage during transportation.
For cargo such as glass products, precision equipment, high-value electronics, medical devices, display cabinets and commercial samples, the greatest concern is often physical damage rather than loss.
To provide additional protection, Newfly offers a Comprehensive Cargo Insurance option.
This plan covers not only the loss of cargo, but also accidental physical damage that occurs during transportation, subject to the terms, conditions and claims assessment.
Insurance Premium
The premium is calculated at 10% of the declared cargo value.
For example:
Insurance premiums are calculated based on the declared commercial value of the shipment.
Customers must declare the actual cargo value and provide valid supporting documents such as a commercial invoice or purchase receipt.
What Does This Insurance Cover?
This insurance provides protection for both cargo loss and accidental physical damage during transportation.
Coverage may include, but is not limited to:
All claims are subject to investigation and approval based on the actual circumstances of each case.
Partial Damage Does Not Mean Full Compensation
One of the most common misunderstandings about cargo insurance is that any damage automatically results in compensation for the entire product.
This is not how cargo insurance works.
If only part of an item is damaged, compensation will normally be assessed based on the reasonable cost of repairing or replacing the damaged portion, rather than reimbursing the full value of the product.
For example,
If a mobile phone arrives safely but the display screen is cracked during transportation, compensation will generally be assessed based on the reasonable cost of replacing the screen instead of the value of the entire phone.
Likewise, if one chair from a six-piece dining set is damaged during transit, the assessment will normally be based on the damaged chair only, not the complete furniture set.
Cargo insurance is intended to compensate for the actual loss suffered, rather than providing payment beyond the extent of the damage.
Why Is Warehouse Inspection Required?
Many customers ask why the cargo must be opened for inspection before shipment.
The answer is simple.
The warehouse needs to verify the condition of the cargo before export.
If the goods arrive with existing damage, missing parts, inadequate packaging or any visible defects, our warehouse team can notify the customer immediately and recommend appropriate corrective actions before shipment.
This process helps protect both the customer and the carrier by clearly documenting the cargo condition before transportation begins.
Warehouse inspection may include:
Please note that warehouse inspection is not a product quality inspection or functional testing service.
Why Is Wooden Crating Mandatory?
Wooden crating is one of the most effective ways to reduce transportation risks.
International sea freight involves multiple handling stages, including loading, unloading, stacking, port operations and inland transportation.
Cargo inside a container is often subjected to considerable pressure throughout the journey.
Without adequate protection, even properly handled cargo may be damaged simply due to the weight of surrounding cargo.
Wooden crating helps distribute external pressure and significantly improves cargo protection during transportation.
For this reason, wooden crating is mandatory for all shipments covered under the Comprehensive Cargo Insurance plan.
Packaging Responsibility
Cargo insurance protects against transportation risks.
It does not replace proper packaging.
If cargo is packed inadequately, insurance coverage may be reduced or declined.
Examples include:
If an investigation concludes that the damage was primarily caused by insufficient packaging rather than a transportation accident, the insurer reserves the right to reject or reduce the claim.
Proper protection should always consist of three elements:
All three work together to minimise transportation risks.
Cargo That Is Generally Not Accepted for Insurance
Certain products carry exceptionally high transportation risks and are generally not eligible for insurance coverage.
These include, but are not limited to:
Transportation may still be arranged upon customer request.
However, the shipment will be carried entirely at the customer’s own risk, and any breakage, cracks, chips or other physical damage will not be covered by insurance.
What Is Not Covered?
Regardless of the insurance plan selected, the following situations are not covered:
Any false declaration, concealment of material information or violation of shipping regulations may result in immediate cancellation of insurance coverage.
Cargo insurance is not simply about compensation after an incident occurs.
The most effective way to reduce transportation risks is through proper preparation before the shipment leaves China.
For every insured shipment, Newfly carries out cargo inspection, photographic documentation, packaging assessment and wooden crating recommendations before export.
Because preventing loss is always better than making a claim later.
Based in Kuala Lumpur, Malaysia, NEWFLY CARGO & DIGITAL TRADING SDN. BHD. has been providing reliable sea and air freight services between China and Malaysia since 2019. We are committed to delivering high-quality transport solutions tailored to your needs.
Posted by NEWFLY CARGO & DIGITAL TRADING SDN. BHD. on 8 Jul 26
Malaysia
