When you're shipping thousands of dollars’ worth of fashion accessories—from leather belts to custom hats—one wrong move during transit can destroy your shipment and your profit margin. And no freight carrier will cover your full loss unless you’re properly insured.
Cargo insurance offers financial protection for high-value accessory shipments, covering risks like theft, loss, water damage, or delays. The three common coverage levels are Free of Particular Average (FPA), With Average (WA), and All Risk—each with different benefits and exclusions.
At AceAccessory, we strongly recommend buyers insure their orders—especially when shipping by sea or using consolidated cargo. Here's what you need to know.
What are the three levels of cargo insurance cover?
Not all insurance is equal. Some only cover major disasters, while others reimburse you for minor damages. Knowing the difference helps you choose the right protection for your shipment.
The three primary types of cargo insurance are Free of Particular Average (FPA), With Average (WA), and All Risk. FPA is the most basic, while All Risk provides the most comprehensive coverage for high-value goods like accessories.
Comparison of Cargo Insurance Coverage Types
| Insurance Type | What It Covers | Suitable For |
|---|---|---|
| FPA (Free of Particular Average) | Major loss like shipwreck, fire, total theft | Low-risk cargo, low value |
| WA (With Average) | Partial loss due to heavy weather or collision | Moderate value, standard goods |
| All Risk | Covers theft, loss, damage, handling, water, etc. | High-value, delicate cargo |
At AceAccessory, we always recommend All Risk coverage for shipments containing:
- Custom accessory samples
- Leather belts or metal-buckled hats
- Holiday or seasonal collections
- Large mixed-carton shipments
We work with logistics partners like Ping An and CPIC to provide reliable policies backed by global underwriters.
How to calculate shipment insurance?
Cargo insurance is usually calculated as a small percentage of your shipment's declared value. However, under-insuring to save cost is risky—you won’t get full compensation if something goes wrong.
Shipment insurance is typically calculated as 110% of the invoice value × the premium rate (usually 0.2%–0.5% for All Risk). Additional surcharges may apply for sensitive or oversized goods.
Sample Shipment Insurance Calculation
Let’s say you’re shipping 10,000 hair clips valued at $8,000 USD.
| Calculation Element | Amount |
|---|---|
| Declared Invoice Value | $8,000 |
| Insurance Value (110%) | $8,800 |
| Premium Rate (All Risk 0.35%) | $30.80 |
| Final Insurance Cost | $30.80 USD |
If you declare lower than $8,000 and there's a total loss, your compensation will be based on the declared value only. AceAccessory’s logistics team can help calculate exact premiums with every shipping quote.
What is excess cargo insurance?
Standard cargo insurance doesn’t always cover everything—especially if your cargo is unusually valuable or fragile. That's where excess insurance steps in to fill the gap.
Excess cargo insurance provides additional protection above your carrier’s default liability limit, ensuring you recover more of your shipment’s value in the event of partial or total loss.
Why Consider Excess Cargo Coverage?
| Scenario | Standard Coverage Outcome | Excess Insurance Outcome |
|---|---|---|
| Shipment worth $50,000, carrier liability $10,000 | $10,000 compensation | Full or near-full reimbursement |
| Partial water damage to accessory sets | May not qualify under standard terms | Covered under expanded excess |
| Delay due to port strike | Not covered | Covered (with specific rider) |
Excess policies are especially useful if:
- You're using LCL shipping, with shared container risk.
- You’re moving delicate packaging or materials (e.g., ceramics, coated leathers).
- Your buyer requires full commercial invoice reimbursement in case of damage.
AceAccessory’s freight partners offer excess insurance quotes upon request, and we encourage clients to evaluate cost-benefit vs. value of the cargo.
Is cargo insurance worth it?
Many importers hesitate to spend an extra $40 or $50 on insurance—but when things go wrong, that decision can cost thousands. Delays, water damage, and mishandling are more common than you might think.
Cargo insurance is worth it for any shipment over $2,000, especially for sea freight. It protects against the many unpredictable factors in global logistics—from port strikes to damaged packaging to lost containers.
Common Real-Life Scenarios Justifying Insurance
| Incident | Result Without Insurance | Result With Insurance |
|---|---|---|
| Container falls overboard | Total loss, no compensation | Reimbursed up to policy limit |
| Carton damaged in customs inspection | Claim denied by freight co. | Covered by All Risk plan |
| Theft from transit warehouse | No responsibility taken | Covered by theft clause |
AceAccessory once supported a client whose 5,000-piece belt order was delayed due to flooding at Ningbo port. Their policy covered the air freight re-shipment cost, saving them from losing a key retail window.
Conclusion
Cargo insurance may seem optional—but for high-value accessory shipments, it’s smart risk management. At AceAccessory, we help you choose the right coverage level, calculate premiums, and secure peace of mind before your goods even leave the port.
