Cargo vs Freight Insurance Explained | Wexford Insurance
- Nate Jones, CPCU, ARM, CLCS, AU
- Sep 18
- 2 min read
In the world of cargo trucking, insurance is not just a regulatory requirement—it’s a business necessity. But many trucking company owners and operators often ask: What’s the difference between cargo insurance and freight insurance? While the terms are sometimes used interchangeably, they serve very different purposes.
Understanding the distinction can help you choose the right protection for your business—and avoid costly gaps in coverage. Let’s break it down.
What Is Cargo Insurance?
Cargo insurance protects the goods being transported. It covers physical loss or damage to the cargo while in transit due to:
Accidents
Theft
Fire
Natural disasters
Mishandling
This type of insurance is typically purchased by shippers, carriers, or consignees who want to ensure that the value of the goods is protected during transportation.
There are two main types of cargo insurance:
All-Risk Coverage: Offers broad protection against most types of damage or loss.
Named Perils Coverage: Covers only specific risks listed in the policy (e.g., fire, collision, theft).
What Is Freight Insurance?
Freight insurance, on the other hand, is designed to protect the freight forwarder or carrier. It covers liabilities that arise from:
Errors or omissions
Delays in delivery
Loss of revenue due to service disruptions
Legal claims from shippers
This type of insurance is often used by freight brokers, logistics providers, and carriers to protect themselves from financial losses related to the transportation service, not the cargo itself.
Key Differences at a Glance
Do You Need Both?
If you're a cargo trucking company, you likely need cargo insurance to protect the goods you haul. However, if you also act as a freight broker or logistics provider, you may need freight insurance to cover your service-related liabilities.
Wexford Insurance: Your Partner in Protection
At Wexford Insurance, we specialize in providing tailored insurance solutions for cargo trucking companies across the U.S. Whether you're an owner-operator or manage a fleet, we help you secure:
Trailer Interchange
General Liability
Physical Damage Coverage
Conclusion
Understanding the difference between cargo and freight insurance is essential for any transportation business. Cargo insurance protects the goods. Freight insurance protects the service. Both are important—but which one you need depends on your role in the supply chain.
Contact Wexford Insurance and get help in choosing the right coverage for your cargo trucking business.
