When referring to cargo insurance, what does the term "breakage" deductible imply?

The term "breakage" deductible in cargo insurance relates to the specific amount that the insured is responsible for covering when items are damaged during transit. The deductible represents a portion of the loss that the insured agrees to pay out of pocket before the insurance coverage becomes effective for the remaining cost. This is particularly relevant for fragile items that may be more prone to breakage, as it delineates responsibilities in the event of damage.

Understanding this concept is critical when evaluating cargo insurance policies because it highlights the financial responsibilities of the insured, especially in scenarios involving breakable goods. The other options do not accurately convey the essence of the deductible. For instance, full coverage for all damages implies no financial responsibility for the insured, which does not align with the concept of a deductible. A separate policy for breakage only suggests a distinct insurance policy focused explicitly on breakage, which is not how deductibles function. Lastly, the notion of higher limits for fragile items misrepresents the concept as it underscores monetary limits rather than the cost-sharing arrangement inherent in a deductible.