All Risk or Your Risk? When All-Risk Cargo Insurance Companies Attempt to Shift the Risk Back to You

Petroleum and chemical companies rely upon the safe and efficienttransport of cargo. Unfortunately, while the open roads, seas and skies evoke an air of mystery and magic to adventurers, they may pose a significant threat to your cargo. Joseph Conrad and Ernest Hemingway waxed poetically about the majesty of the sea, but then, neither Conrad nor Hemingway were responsible for the safe and efficient transport of tens of millions of gallons of fuel oil. For this reason, most chemical and petroleum companies purchase a form of cargo insurance. The majority of cargo insurance policies are “all risk” policies—insurance policies that cover all losses, no matter the cause, unless specifically excluded by the policy. Given this extensive breadth of coverage, most policyholders assume that in the event of a loss, their cargo will be covered. Many cargo insurance companies, however, attempt to shift the risk of loss back to their policyholders—essentially arguing that “all risk”means “your risk.”