Insuring a Clothing Shipment: What to Cover and How
The direct answer: insure from the warehouse in Pakistan to your warehouse at home, with no gap between the two policies. Most claim failures in this trade are not disputed incidents; they are uncovered gaps where a policy ended before the goods did.
Part of the buyer journey: Pay, Ship and Clear Customs Without Surprises — stage 3 of 8, with the other guides for this stage.
What the policy has to cover
The full value of the goods, the mode of transport, the route, and the packing. Insured value should reflect what the goods are worth to you, not what you paid, because you will want to recover the margin as well as the cost.
Make sure the policy is all-risks rather than named-perils. A named-perils policy covers only the specific events listed, and almost every claim you are likely to have is not on that list.
What is commonly excluded
Under-insurance, which insurers penalise by reducing the claim proportionally. Under-declared value is a form of this and it is the most common claim failure in apparel trade.
Also excluded in many policies: inherent vice such as shrinkage or deterioration, inadequate packing, and damage arising from non-compliance with labelling or customs requirements. Pack the goods properly and declare the value honestly.
Claims and documentation
Document damage at the point of delivery, before the cartons are moved, with photographs and a written record. Photographs taken later, in your warehouse, are far weaker evidence.
Keep the commercial invoice, packing list and transport documents, because the insurer will require them to assess the claim. A claim assembled weeks after the fact, from memory, is a claim that gets reduced.
What stocklots are available right now?
Reading is step one. Send your requirement and we will check the factory network for current options.
Buyer questions, answered
Is cargo insurance expensive for clothing?
It is a modest percentage of the goods value, and the cost of not having it is much larger. The calculation that matters is the value of a whole lost shipment against the premium, and on any meaningful consignment the premium is a small fraction.
What if my supplier arranges the insurance?
Check what it covers and whose claim it is. Supplier-arranged cover may be limited to the invoice value rather than your sales value, and may terminate at the port rather than at your warehouse. Read the terms rather than assuming.
Do I need insurance for air freight?
Yes. Carriers have limited liability and it is far below the value of a clothing consignment. Insure it the same way you would a sea shipment.