Marine cargo insurance protects goods against loss or damage while they are being transported by sea, air, road, rail, or river.In Bangladesh, importers generally need coverage from a licensed local provider, such as Green Delta’s Marine Cargo & Hull Insurance, and banks may require a policy or cover note for LC-related transactions.
Imagine your container is delayed at Chattogram Port, damaged by rain while being transported to Dhaka, and you later discover that your policy does not cover the loss. The financial impact can be significant, especially when the shipment is worth lakhs of Taka.
Based on experience advising businesses on insurance matters in Bangladesh, Knowing the marine insurance types and benefits before shipment can help avoid costly surprises.
Marine cargo insurance is a policy that pays you if your goods are lost, damaged, or stolen while being shipped. Despite the name, it is not limited to ships. It also covers cargo moving by air, road, rail, and river, from the supplier’s warehouse to yours.
So, is marine insurance mandatory for imports in Bangladesh? Yes. Under the Import Policy Order, imported goods must be insured with a licensed insurance company in Bangladesh. Banks also ask for the policy or cover note before they release payment under your LC.
Here is who sets the rules:
Your policy works on utmost good faith, meaning you must tell the insurer everything that could affect the risk. You also need an insurable interest, meaning you would actually lose money if the goods were damaged.
Bangladesh requires import cargo to be insured locally. A policy bought abroad may not be accepted by your bank, and claims could get complicated.Always confirm the insurer is fully IDRA-licensed, such as Green Delta Insurance PLC.
The cover is not limited to the sea voyage. A good policy can protect your goods at Shahjalal International Airport, on the Chattogram-to-Dhaka road haul, on river barges, and while they sit in a warehouse before delivery.
Whoever carries the risk during shipping needs the cover. That depends on the trade term (Incoterm) in your contract. Many Bangladeshi traders sign the contract first and ask about insurance later, which is where the trouble starts.
If you buy on FOB or CFR terms, the goods become your responsibility once they are loaded on the ship. You must arrange the insurance, even though the freight may already be paid.
The most common mistake is assuming the supplier’s insurance protects you. On FOB and CFR deals, the supplier has no duty to insure the cargo for you. If a container is damaged in rough Bay of Bengal weather, you could be left with a full loss on a Tk 60 lakh shipment.
Even on CIF deals, ask your bank whether local cover is still needed for your LC. Buy your policy before the cargo leaves the supplier’s warehouse, not after the ship sails.
If you sell on CIF or CIP terms, you must insure the goods for your buyer’s benefit. This is common for RMG, leather, jute, and frozen food exporters.
Your buyer’s LC will usually state the rules. Under UCP 600, the standard banking rules for LCs, the insurance document normally covers at least 110% of the invoice value. If your documents don’t match the LC exactly, the bank can refuse payment.
What if your foreign buyer insists on using its own insurer? That is allowed, but check two things:
| Trade Term | Who Usually Arranges Insurance | What It Means for You |
| EXW | Buyer | Buyer carries risk from the seller’s premises |
| FOB | Buyer | Importer must insure from the moment of loading |
| CFR | Buyer | Freight is paid, but cargo is not insured |
| CIF | Seller | Exporter insures at 110% for the buyer |
| CIP | Seller | Exporter insures with wider cover (ICC A) |
| DAP | Seller carries the risk | Seller bears transit risk until arrival, but check who insures |
Knowing who must buy the cover is only half the job. The next question is which type of cover to choose, and that decides whether your claim gets paid.
When you ask for a marine cargo insurance quote in Bangladesh, the insurer will almost always ask: “Which clause do you want?” The Institute Cargo Clauses (ICC) are the standard sets of terms used worldwide, and your choice decides what your policy will actually pay for.
Many traders pick the cheapest option to save on premiums. Understanding the types of coverage of marine insurance available can help you choose protection that fits your business and avoid costly gaps when a claim arrives.
| ICC (A) | ICC (B) | ICC (C) | |
| Cover level | Widest (“all risks”) | Medium | Basic |
| What it covers | Everything, except listed exclusions | Named events only, including water entering the ship or container, earthquake, and cargo washed overboard | Major accidents only, such as fire, sinking, collision, and vehicle overturning |
| Theft and pilferage | Covered | Not covered | Not covered |
| Premium | Highest | Lower | Lowest |
Note that “all risks” does not mean every risk. It means all accidental loss or damage except what the policy specifically excludes.
Strikes and war are not included in ICC A, B, or C, so ask about these extras:
If you import every month, an open cover may be easier. It automatically covers all your shipments over a set period, so you don’t need a new policy each time. One-off buyers can stick with a single-shipment policy.
Even the widest policy usually excludes:
A common question importers ask is simple: “What will I pay?” The answer is mostly set for you. Marine insurance premiums in Bangladesh are set by IDRA, based on recommendations from the Central Rating Committee, so insurers cannot freely offer discounts. The current rates were fixed in August 2020, at 0.45% for ICC (A) and (B) and 0.30% for ICC (C).
Say you import machinery with a CIF value of Tk 50 lakh and choose ICC (A) cover:
General insurance, including marine, carries 15% VAT on the gross premium. Ask your insurer about any other small charges on the policy.
Not everyone agrees with this system. Critics say the 0.30% minimum is higher than international rates and increases business costs that are passed on to consumers. In September 2021, steel maker BSRM complained to the Competition Commission, arguing that a minimum rate hurts competition.
IDRA’s position is that rates follow the law and expert recommendations. It also points out that the 2020 tariff revision cut the previous premium rate by 22%.
Since price barely differs, compare what actually matters:
A cheaper policy that pays late costs more than a fair one that pays on time.
Risk Scenarios Bangladeshi Importers and Exporters Face
Cargo problems rarely look like the textbook. They happen at a crowded Chattogram yard, on a rainy highway, or on a barge in the Meghna. Here are seven situations traders face, and whether insurance would respond.
These are illustrative examples, not real client cases.
| Scenario | Usually Covered? | Clause Needed | Add-On to Ask For |
| Port delay | No (delay excluded) | None | Reefer breakdown |
| Cyclone or lighter damage | Yes | ICC (A) or (B) | Lighterage cover |
| Road accident or theft | Yes, with the right clause | ICC (A) | Inland transit, TPND |
| Depot fire | Yes, if within cover period | All clauses | Warehouse extension |
| Land port or India route | Yes, if the route is named | ICC (A) | Land transit |
| River bulk loss | Partly | ICC (B) or (C) | Shortage clause |
| Hartal or riot | Only with SRCC | Strikes clause | SRCC |
Knowing the risks is the first step. The next is buying the right policy, and doing it before your goods leave.
Most rejected or underpaid claims come from a few avoidable errors. If you are wondering why your cargo claim was rejected, one of these is usually the reason.
Avoiding these mistakes puts you in a strong position. Even so, you may still face a loss, so it helps to know how to claim.
Understanding the legal requirements, policy terms, and claim process can help you choose insurance with greater confidence. Make sure you select the right coverage clause for your needs and keep your policy documents, receipts, and other records ready in case you need to make a claim.
Before purchasing, you can request a quote from an insurance company to review your coverage and required documents.
Yes. Imported goods must be insured with a licensed insurer in Bangladesh under the Import Policy Order. Banks also usually ask for the policy or cover note before settling your LC, so buy cover before the shipment leaves.
Premium is a percentage of the insured value. Add 10% to your CIF value, multiply by the IDRA-approved rate for your clause, then add 15% VAT. A Tk 50 lakh shipment, for example, costs roughly Tk 28,000 to insure.
A cover note is temporary proof that you are insured. The insurer issues it quickly, often before shipping. The policy is the full contract with all terms and exclusions, and it follows after payment and documentation.
Generally, no. Standard policies exclude loss caused by delay, even when the delay itself comes from an insured event. Physical damage during the delay, such as fire or rain damage, may still be covered.
Yes, if your contract allows it. On FOB or CFR terms, the buyer normally arranges insurance. On CIF or CIP terms, you must insure, unless the LC says otherwise. Always check where cover starts, since gaps before loading can leave you exposed.
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