Import Insurance Explained: What to Cover, What to Skip, and How to Make a Claim

Most Nigerian importers think about insurance the same way they think about seatbelts, something that’s required, but unlikely to matter.

Until the container arrives at Apapa and half the goods are water-damaged. Or the shipment goes missing between Guangzhou and Lagos. Or a partial delivery comes in and no one knows where the rest went.

Marine cargo insurance is the one cost in your import chain that pays you back when everything else goes wrong. This guide explains exactly how it works for Nigerian importers: which policy to buy, what it actually covers, what it won't, and how to make a claim that actually gets paid.

How Much Does Marine Insurance Cost?

Nigerian marine insurance premiums are calculated on the CIF value × 110%:

Formula: Insured Value = (Cost of goods + Freight) × 110% Premium = Insured Value × Premium Rate

Premium rates in Nigeria typically range from:

• ICC C: 0.1% – 0.3%

• ICC B: 0.2% – 0.5%

• ICC A: 0.3% – 1.5% (depending on goods type and route)

Practical example:

• Goods value: $8,000

• Sea freight: $800

• CIF base: $8,800

• Insured value (110%): $9,680

• ICC A at 0.5% premium: $48.40

That's about ₦75,000 to cover a shipment worth ₦14 million+. A small cost relative to the exposure.

Rates vary by insurer and goods type. Electronics, machinery, and fragile goods attract higher rates. Durable industrial goods attract lower rates.

How to Buy Marine Insurance in Nigeria

Your options:

Through your freight forwarder or clearing agent — many clearing agents have arrangements with insurers and can issue certificates on your behalf as part of their service package. Convenient, but always confirm the insurer is NAICOM-licensed.

Directly through a Nigerian insurer — you can approach AIICO, Leadway, AXA Mansard, Cornerstone, IGI, or any NAICOM-licensed company directly. Useful if you have an ongoing import operation and want to negotiate an open cover policy (a standing policy that covers multiple shipments without buying a new policy each time).

Through a sourcing agent — if you're working with Proc360, insurance coordination is part of the service for shipments we manage.

What to verify before buying:

• The insurer is listed on the NAICOM register

• The certificate meets CBN/Form M requirements

• The insured value is at least 110% of CIF

• The coverage type (A, B, or C) is clearly stated

• The policy covers the full voyage: from the supplier's warehouse in China to your address in Nigeria

How to Make a Cargo Insurance Claim (Step by Step)

When something goes wrong, how you respond in the first 24–48 hours determines whether your claim gets paid.

Step 1: Notify your insurer immediately: As soon as you discover damage or loss, contact your insurer. Don't wait until you've assessed the full extent of the problem. Late notification is one of the most common reasons claims are denied.

Step 2: Do not dispose of damaged goods: Keep all damaged goods exactly as they are. The insurer will send a surveyor to inspect them. Disposing of damaged items before the survey gives the insurer grounds to reject your claim.

Step 3: Document everything — thoroughly: Take photos and videos of:

• The packaging (especially outer boxes and container)

• The damage visible on arrival

• Any markings on the container or pallets

• The delivery note showing what was received

The more photographic evidence you have, the stronger your claim.

Step 4: Get a survey report: The insurer appoints an independent marine surveyor to assess the damage. Cooperate fully and provide all documents the surveyor requests.

Step 5: Submit your claim documents

You'll typically need:

• Insurance certificate/policy

• Original Bill of Lading or Airway Bill

• Commercial invoice and packing list

• Survey report from the appointed surveyor

• Photographs of damage

• Delivery note or receipt showing discrepancy

• Letter of claim addressed to the insurer

• Police report (for theft or pilferage claims)

Step 6: Follow up consistently: Claims processing takes 30–90 days depending on complexity. Check in weekly with your claims handler and respond quickly to any requests for additional information. Delays on your side extend the timeline.

Common Reasons Claims Get Rejected

• Late notification — reported too long after the incident

• No surveyor appointment — damage disposed of or goods moved before inspection

• Poor or insufficient packaging — insurer argues the loss was the importer's fault

• Underinsurance — insured value was lower than actual cargo value; claim is settled proportionally

• Wrong clause — ICC C doesn't cover the type of loss claimed (e.g. partial damage)

• Policy lapse — insurance expired before the goods arrived in Nigeria

ICC C — Basic Cover (Most Limited)

ICC C is the cheapest option and the most commonly used in Nigeria because it satisfies the Form M requirement at minimum cost. But it has a critical limitation: it only covers total loss situations, not partial losses.

What ICC C covers:

• Fire and explosion

• Vessel sinking, stranding, grounding, or collision

• General average sacrifice and jettison

• Total loss only — if 30% of your goods are damaged, you get nothing

What ICC C does NOT cover:

• Partial loss under any circumstances

• Theft

• Water damage

• Handling damage

Premium rate: typically 0.1%–0.3% of insured value. Very cheap.

Best for: low-value, durable goods where a partial loss is financially manageable, or when you're simply satisfying a regulatory requirement at minimum cost.

ICC A vs ICC C: Which Should You Choose?

How Proc360 Handles Insurance for Your Shipments

When you import through Proc360, you don't need to chase insurance separately.

Keeping your goods safe is as easy as selecting insurance coverage as you get ready to ship your goods.

Our goal is to make sure that in the rare event that something goes wrong, you're not stuck without cover.

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Why Insurance is Mandatory in Nigeria — Not Optional

Before anything else: marine cargo insurance is not a choice for Nigerian importers. It is a legal requirement.

To file a Form M, your Authorized Dealer Bank requires an insurance certificate issued by a Nigerian insurance company, covering at least 110% of the CIF value of your goods (Cost + Insurance + Freight).

Two things that catch first-time importers off guard:

1. Your supplier's insurance doesn't count. If you buy on CIF terms (where the supplier arranges freight and insurance), their foreign insurance policy will be rejected. Nigerian law requires you to purchase your own insurance from a NAICOM-licensed Nigerian insurer. This is non-negotiable.
   

2. The insured value must be 110% of CIF — not just the product cost. That extra 10% covers your expected profit on the goods, not just the replacement cost.
   

NAICOM (National Insurance Commission) is Nigeria's insurance regulator. Only policies from NAICOM-licensed companies are valid for Form M purposes. Insurers like Leadway Assurance, AIICO Insurance, AXA Mansard, Cornerstone Insurance, and IGI are all recognised options.

The Three Types of Cargo Insurance (ICC A, B, and C)

Nigerian importers work with the Institute Cargo Clauses (ICC) — an internationally standardised set of marine insurance terms issued by the Lloyd's Market Association. There are three levels, named A, B, and C, from broadest to most limited.

ICC A — All Risks (Broadest Cover)

ICC A is the closest thing to "cover everything." It protects against all physical loss or damage to your goods during transit, except for specific listed exclusions.

What ICC A covers:

• Fire and explosion

• Vessel sinking, stranding, grounding, or collision

• Theft and pilferage

• Rough handling damage (loading, unloading, stacking)

• Water damage from the sea, rain, or flooding during transit

• General average contributions (explained below)

• Jettison (goods thrown overboard to save the vessel)

What ICC A does NOT cover:

• Deliberate damage by you (wilful misconduct)

• Inherent vice — goods that deteriorate naturally due to their own properties (e.g. fruit rotting)

• Insufficient or unsuitable packaging

• Ordinary wear and tear or gradual deterioration

• War and strikes (these require separate add-on cover)

• Delay, even if caused by an insured event

Premium rate: typically 0.3%–1.5% of the insured value, depending on the goods, route, and insurer.

Best for: electronics, phones, fashion, fragile goods, high-value shipments, anything you'd genuinely struggle to absorb a loss on.

ICC B — Named Perils (Intermediate Cover)

ICC B covers a specific list of events — if your loss doesn't fit the list, it's not covered. It offers less protection than ICC A but more than ICC C.

What ICC B covers:

• Fire and explosion

• Vessel sinking, stranding, grounding, or collision

• Earthquake, volcanic eruption, lightning

• Discharge of cargo at a port of distress

• Sea, lake, or river water entering the vessel or container

• Total loss of any package washed overboard during loading or unloading

• General average sacrifice and jettison

What ICC B does NOT cover:

• Theft or pilferage (a significant gap)

• Rough handling damage

• All the standard exclusions from ICC A

Best for: bulk goods, less fragile cargo, situations where theft risk is low.

The honest answer: ICC C works for satisfying the regulatory requirement but offers very little real protection. If your shipment is worth more than a few hundred dollars, the difference in premium between ICC C and ICC A is usually small enough to make ICC A the smarter choice.

Example: A shipment valued at $10,000 (with $2,000 freight) has an insured value of $13,200 ($12,000 × 110%).

• ICC C at 0.2%: Premium = $26.40

• ICC A at 0.5%: Premium = $66

For $40 more, you have all-risk cover vs. total-loss-only cover. On a shipment worth ₦20 million+, that difference is irrelevant.

What No Marine Insurance Policy Covers

Regardless of which clause you choose, certain losses are universally excluded:

Inherent vice — if your goods degrade due to their own nature (fresh produce rotting, rubber cracking in heat, batteries discharging), no policy pays. Manage this through packaging and transit time, not insurance.

Poor packaging — if your goods arrive damaged because they weren't packed properly, the insurer will deny your claim. Always specify adequate packaging to your Chinese supplier before shipment and get it confirmed.

Delay — if your goods take longer than expected and you lose a sales opportunity, insurance doesn't cover it. Marine insurance covers physical loss, not consequential losses.

Wilful misconduct — you cannot deliberately damage or discard your own goods and claim on them.

Ordinary leakage and wear — gradual deterioration expected in the normal course of transit is not covered.

War and strikes — standard ICC policies exclude war risk and strikes. These are available as separate add-ons and are relevant for certain shipping routes. The China-Nigeria route via sea currently doesn't require this, but always confirm with your insurer.

What is General Average — and Why It Matters

General average is one of the most misunderstood concepts in shipping insurance, but it matters a lot if you're shipping by sea.

When a ship faces an emergency, like for example, a fire that requires jettisoning some cargo to save the vessel, all cargo owners on that ship share proportionally in the loss, even if their own goods weren't damaged. This is called general average.

Example: A vessel carrying your goods catches fire. The crew throws ₦500 million worth of various goods overboard to save the ship. You had nothing thrown overboard, but because your goods were on board, you may still be required to contribute to the general average fund before your goods are released.

Without ICC A coverage (which covers general average contributions), you could be stuck paying a significant sum to retrieve undamaged goods.

This is a real risk on container ships and another strong argument for ICC A over ICC C.