History can answer this question. The first insurance contracts, even from antiquity, had to do with ship and cargo insurance.

To insure means to act proactively against a potential harmful event.

What do we mean by harmful event? A random, violent act that we cannot control (forces majeure).

All kinds of transportation, either by road, air or sea, include not only random, but also sudden events and, most of all, events that are beyond the shipper’s, consignee’s, forwarder’s and transporter’s control.

Especially when it comes to containerized, multimodal sea transports, the need to insure is urgent also because of “General Average”, a term we will refer to comprehensively at another article.

The owner of a cargo, who has what we call insurable interest for the merchandize, must make sure that the cargo is insured because:

• The transporter or forwarder is to blame, but not always
• The transporter’s or forwarder’s liability is regulated according to International Law and includes complicated procedures and high costs (court expenses etc.) for any compensation to be awarded. Furthermore, the owner of the cargo will surely not be compensated for the whole value of the cargo
• Finally, the insurance cost of the cargo is low in comparison to the value of the cargo, and also the freight.

Bare in mind that the type of insurance (clauses) must be selected in regard to the characteristics of the cargo, but also the shipper’s and consignee’s real needs.