Does cargo insurance fully eliminate the risks of loss or damage during shipment?

Cargo insurance does not fully eliminate the risks of loss or damage during shipment, which is why this choice is accurate. While cargo insurance provides a safety net by compensating for certain types of loss, it has its limitations. Specific exclusions, such as those associated with improper packaging, acts of war, government actions, or inherent defects in the goods themselves, mean that not every kind of risk is covered. Furthermore, certain perils may be excluded based on the policy type or the circumstances of loss, such as damage due to natural disasters, pilot error, or other calamities that may affect transportation.

In contrast, other options imply that cargo insurance guarantees comprehensive protection under all conditions. For instance, claiming that insurance covers all risks misrepresents the nature of these policies, which often require careful scrutiny of terms and conditions. Similarly, stating that coverage applies only to high-value shipments overlooks the fact that insurance can apply to shipments of varying values but still does not promise full risk elimination. Lastly, suggesting that proper packaging alone ensures coverage fails to recognize that while it may mitigate some risks, it does not address all potential causes of loss. Overall, the nuances within cargo insurance highlight that while it offers essential protection, it cannot entirely remove the inherent risks associated with shipping