What can exclusions in cargo insurance policies do?

Exclusions in cargo insurance policies serve a crucial role in defining the scope of coverage provided to the insured. By explicitly stating what is not covered, exclusions help to limit potential claims for risks that fall outside the policy’s agreed terms. For instance, if certain perils—such as damage due to wear and tear, or losses resulting from inadequate packing—are excluded, then the insurer is not liable for claims arising from those specific risks. This allows for a clearer understanding of the policy's boundaries and helps to manage the insurer's risk exposure.

In contrast to this, broader coverage would typically involve additional inclusions or modifications rather than exclusions. Lowering insurance premiums generally results from adjustments to coverage levels or the insured's risk profile, but exclusions specifically do not automatically lead to lower costs—they merely clarify what is not included. Finally, expanding the insured items list would involve adding more items to the coverage rather than defining what is excluded.