Import and Export Risk: Ten Exposures Every Business Should Understand

TIS Vietnam Insurance Broker | Series: What businesses should know about insurance | Published: 21 October 2026

Importers and exporters tend to concentrate on price, freight cost, delivery schedules and payment terms.

Yet risk is not confined to cargo that is lost or damaged in transit. A shipment can arrive intact and still leave the business out of pocket, through additional costs, an unpaid invoice, a contractual dispute or the recall of products already in the market.

Drawing on many years of advising on marine insurance and risk management, TIS has set out 10 areas of exposure that trading businesses should keep in view. They follow the life of a shipment, from preparation and carriage through to delivery and the completion of the sale. The year-end renewal season is a good time to review them.

A. Risks to the cargo and its carriage

1. Packing, handling and storage

Cargo can be broken, scratched, damaged by moisture, contaminated or lost as a result of unsuitable packing or lashing, containers that are not fit for purpose, or errors in loading and discharge.

Some commodities are also prone to self-heating, oxidation, rust, ordinary loss in weight or volume, cargo or ship’s sweat, cross-contamination and taint. For food, seafood and pharmaceuticals, a reefer breakdown or a departure from the required temperature can lead to substantial losses.

Businesses should bear in mind that not every loss in transit is insured, particularly where it arises from the inherent nature of the goods (inherent vice), from inadequate packing, or from an unsuitable container or conveyance where the business loaded the cargo itself.

2. Casualties and incidents in transit

Vessels can collide, run aground, sink, catch fire or explode, or lose containers overboard. Cargo may also be damaged by fire, explosion or contamination originating from dangerous goods belonging to another shipper on the same voyage, or be lost to piracy or the theft of an entire container.

Exposures arise as well on inland and multimodal legs: road vehicles overturning or catching fire, container freight station (CFS) operations, barge transport and waiting time at the port. For deck cargo, out-of-gauge (OOG) cargo and project cargo, the insurance terms often have features of their own.

Businesses should therefore confirm that their cover matches the whole of the actual journey, not only the sea passage.

3. Natural perils, war and civil unrest

Storms, heavy weather, torrential rain and flooding at ports or transit warehouses can damage cargo.

War, attacks on or seizure of vessels, strikes, demonstrations, riots and the need to divert to avoid danger areas are further concerns. These events can raise costs and extend transit times.

However, war, strikes and other special risks (including radioactive, chemical and biological contamination) are generally not covered automatically under a standard cargo policy. Businesses should check the specific terms and scope of their cover.

4. General Average and salvage

This is an exposure that many cargo owners overlook. When a vessel is in peril, the master may have to take extraordinary measures to save the ship and cargo. In some cases, cargo owners are required to contribute their proportionate share of General Average or salvage charges, even where their own goods are undamaged. In practice, the cargo may be withheld until the owner has committed to the contribution and provided security for it, while the order waits for delivery.

Without suitable insurance, this contribution can become an unplanned financial burden.

5. Third-party liability

It is not only a business’s own goods that are at risk. It may also be liable for loss or damage caused to others. For example, a misdeclaration of dangerous goods, a failure to disclose relevant information about them, an incorrect container weight (VGM), or unsuitable packing or lashing can lead to fire, explosion, pollution, containers collapsing or falling, or damage to the goods and property of other parties.

These liabilities need to be considered separately, because cargo insurance principally indemnifies physical loss of or damage to the insured shipment itself (together with certain associated costs) and generally does not protect the cargo owner against legal liability to third parties.

B. Risks in trade and delivery

6. Delay and the costs that follow

Late vessels, port congestion, equipment shortages, rerouting, system failures and cyber-attacks on ports and shipping lines can all delay cargo and disrupt production and delivery plans.

The business may incur demurrage at the port, detention charges for containers held beyond the free time, storage, transhipment and additional transport costs, sudden surcharges (such as war-risk surcharges), or contractual penalties for late delivery.

It is worth noting that standard cargo insurance generally does not compensate financial loss caused by delay, even where the delay stems from an incident during the voyage.

7. Customs, documentation and the terms of sale

Incorrect documentation, missing licences, goods that fail import standards, embargo restrictions or quarantine requirements can result in cargo being held, re-exported or even seized or destroyed, including where the cause lies in another party’s goods within the same consignment.

Unfamiliarity with the international commercial terms (Incoterms) can also lead to disputes between buyer and seller over when risk passes, and over who is responsible for arranging carriage and insurance.

In our advisory work, we often remind clients that the party who arranges the insurance is not necessarily the party bearing the risk throughout the journey. This should be settled clearly when the sales contract is signed.

8. Buyer’s refusal to accept the goods

Sometimes the goods reach the port but the buyer declines to take delivery, citing a quality dispute, a change in demand, a fall in market prices or a wish to renegotiate the contract.

The seller may then face storage and container charges, the cost of finding a new buyer, a forced sale at a discount, or the expense of returning the goods.

This is primarily a commercial risk. Holding cargo insurance does not mean that these costs will be recovered from the insurer.

9. Non-payment and trade fraud

A buyer who pays late, becomes insolvent or defaults can leave a business short of cash and struggling to collect its receivables.

There is also the risk of fraud, such as forged emails, bank details, bills of lading or documents, or delivery to the wrong recipient. The insolvency of a shipping line or freight forwarder, or the release of goods without presentation of the original bill of lading, can likewise leave a business without its cargo and without payment.

Some payment risks may be addressed through trade credit insurance. Fraud and deception, however, need to be assessed separately and do not automatically fall within the scope of that cover.

C. Risks after the sale

10. Product liability and product recall

An exporter’s exposure does not necessarily end once the goods have been delivered and paid for.

If a defective product injures a user or damages a third party’s property, the business may face a claim or litigation overseas. If a product proves unsafe and has to be recalled, the business may also bear the costs of inspection, transport, replacement and destruction, along with damage to its reputation.

Product liability insurance and product recall insurance are separate areas of cover, and each should be considered on its own terms, depending on the product and the export market.

Three questions to answer before renewal

1. Which of these ten exposures does the business face?
2. If an incident occurred, how large could the loss be, and where would responsibility lie?
3. Does the business have risk management measures and an insurance programme suited to each exposure?

Key points for businesses

These ten groups show that import and export risk does not arise only while the cargo is at sea. It begins with packing, continues through carriage, delivery and payment, and extends beyond the point at which the product reaches the end consumer. When arranging insurance, businesses should therefore consider their import and export activity as a whole, rather than concentrating on a single cargo policy.

Not every risk is insurable. Price movements, exchange rates, loss of market and loss of anticipated profit are commercial risks that a business generally has to manage itself.

For risks that can be insured, the effectiveness of the cover also depends on the policy itself: whether the sum insured reflects the full value of the goods and associated costs, whether the terms suit the type of cargo and the voyage, whether disclosure is complete, and whether losses are notified promptly. Depending on the policy terms, shortcomings in these areas can reduce the amount recoverable or affect the right to claim. In addition, a carrier’s liability is generally limited and the time bar for claims is relatively short, so prompt notification of loss and early reservation of rights against the carrier are particularly important.

The task is to decide which risks to prevent, which to transfer to an insurer, and which the business must retain and manage itself.

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Frequently asked questions

Does cargo insurance cover all ten of these exposures?

No. The scope of cover depends on the terms of each policy. Some risks, such as war, strikes, product liability and trade credit, require additional clauses or a separate class of insurance. Others are commercial risks that the business must manage itself.

Is a delay in delivery, or a buyer’s refusal to accept the goods, covered by cargo insurance?

Generally not. These are essentially financial losses and commercial risks, which usually fall outside standard cargo cover. Businesses should check the specific terms of their own policy.

If my goods are undamaged, why might I still have to contribute to General Average?

When a vessel is in peril and the shipowner or master takes extraordinary measures to save the ship and cargo, those with cargo on board may be required to share the cost, including owners whose goods are undamaged. Suitable insurance will usually allow the business to pass this contribution to its insurer, subject to the policy terms.

When should a business review its import and export insurance programme?

The renewal season is a natural time to do so. A review is also advisable when the business enters a new market or changes its shipping route, commodity or Incoterms, or when the value of its shipments rises significantly.

Note: this article is for general information only and does not constitute advice on any specific insurance policy. Cover depends on the terms of the policy and the decision of the insurer.