When trade policies change—especially when import taxes are introduced or adjusted—the effects ripple far beyond just the cost of goods. These policy shifts alter shipping schedules, inventory strategies, and risk exposures across global supply chains. One industry that feels this disruption immediately is marine insurance.
Marine insurers don’t just underwrite ships and cargo. They assess how goods move, where they’re stored, and under what conditions. And when businesses scramble to respond to trade rules, insurers are left to manage the consequences.
The domino effect of trade policy changes
Whenever new import restrictions or taxes are announced, importers react quickly. Many speed up shipments to bring goods in under old rules. This creates sudden surges in cargo volumes at ports and warehouses. Others delay or reroute deliveries, creating uncertainty. In extreme cases—like we are seeing today—exposed shippers may even cease or pause shipments causing a large drop in demand across key ports.
This kind of volatility makes it harder to assess and manage risk. Goods are no longer moving on predictable schedules. Ports become congested, and cargo often ends up stuck in transit or in storage for extended periods—situations that increase exposure for insurers.
Risks multiply under compressed timelines
When companies try to outpace policy deadlines by fast-tracking imports, the process gets rushed. That leads to a range of new risks:
- Higher chance of physical damage: Rapid handling increases the likelihood of rough loading, improper stacking, and transport damage. With high volumes crammed into short windows, mistakes are more likely.
- Cargo congestion at ports: Ships line up. Containers stack higher. Offloading takes longer. And goods often sit in limbo, unclaimed and exposed to the elements or theft. Cargo theft incidents reached record levels in 2024, with to a total of 3,625 incidents across North America.
- Storage overflow: With more goods arriving than warehouses can handle, some end up in subpar facilities—or remain in containers far longer than they were designed to.
- Unclear coverage limits: Many cargo insurance policies have defined start and end points, typically from warehouse of origin to warehouse of destination. If cargo ends up stored off-site or delayed unexpectedly, coverage may not extend to those situations.
- Losses tied to product degradation: Electronics, perishables, and seasonal items can’t just sit indefinitely. Being held in temporary storage or containers beyond expected timeframes can reduce value—or render the goods unsellable.
- Unplanned storage: Insureds utilize back up or unplanned storage locations such as third-party or non-covered locations, free trade zones, etc. to navigate tariff implications and supply chains which may or may not be capable of handling this type of scale. Vetting the quality of these locations may be difficult.
- Changing cargo values: Shifts in trade policies can alter the declared value of goods, complicating the assessment of cargo worth and insurance coverage requirements. If tariffs increase the manufacturing cost or selling cost of goods in comparison to the amount established in the policy, this difference in valuation can leave the insured exposed in coverage in the case of a loss on the policy.
Playing the timing game has a cost
Importers often believe they can avoid trade policy impacts by getting their goods in early. That may work financially, but operationally it’s risky. Goods brought in ahead of schedule need somewhere to go. If warehousing isn’t lined up, companies can face displaced inventory, increased holding costs and logistical headaches.
Idle inventory ties up capital, especially when demand doesn't match the import surge. It also creates insurance complexities. If a cargo policy was designed to cover transit only, there may be no protection for goods damaged during extended storage.
Even when coverage can be extended, making changes on the spot often leads to higher costs such as increased premiums. In other instances, when coverage is requested during a journey or to include temporary storage locations, strict conditions may be imposed.
The insurance industry response
Marine insurance providers have had to evolve to deal with these new realities. Risk models that once depended on steady shipping volumes and routine schedules now need to factor in the unpredictability of trade responses.
This has driven several key shifts:
- Greater policy flexibility: Insurers are offering more options for transit extensions, warehousing coverage, and rerouted cargo, but these may come with added insurance costs.
- Closer coordination with clients: More underwriters are asking to be involved earlier in logistics planning, especially when clients expect to accelerate or modify shipping due to external pressures. Enhancing client engagement will help the insured understand changes in the supply chain and tailor coverage accordingly.
- Tighter scrutiny of storage conditions: Since more goods are sitting for longer, insurers want proof of secure, climate-controlled, and well-managed secure facilities.
- Limits on capacity during peak surges: When too many shipments come in at once, insurers can’t spread risk effectively. Aggregation of risk is challenging to monitor for shippers and insurers; it can impact available capacity.
- More flexible risk assessment models: Building in more flexible models to understand the dynamic nature of shipping trade patterns.
Importers often believe they can avoid trade policy impacts by getting their goods in early. That may work financially, but operationally it’s risky.
Assessing cargo insurance policies in the face of tariff volatility
The rapidly changing evolution of trade policy creates volatility and unexpected scenarios and clients and insurers need to be prepared. The uncertainty creates opportunity for shippers, brokers, and insurers alike to ask strategic questions about their cargo insurance policies to understand if they have the right coverage, whether they need more coverage, and responsibility for increased risk.
Smarter strategies for importers
For companies trying to navigate uncertain trade environments, the key is balance. Moving goods ahead of trade policy changes can make financial sense—but only if the operational risks are fully considered and controlled.
What businesses can do:
- Work with insurers early. Let your provider know if you plan to shift timelines or bring in higher volumes. Policies can be adjusted proactively, rather than reactively.
- Audit your storage pipeline. Know where your goods will go if they arrive early—and make sure those locations meet the security and environmental standards your insurer requires.
- Avoid unplanned exposure. Don’t assume insurance automatically extends to everything. If goods sit for weeks in transit or in an off-site warehouse, that may fall outside your original coverage.
- Calculate total cost, not just tax savings. Beating a regulatory deadline might save you on duties or fees, but damage, degradation, or insurance gaps can end up costing more in the long run.
Trade policy changes are quietly raising the stakes in cargo risk and coverage
Policy changes that affect international trade don’t just alter pricing. They reshape how and when goods move—and they expose importers to new kinds of risk. Marine insurance is no longer just about covering a journey. It’s about managing uncertainty that starts before the ship even leaves port and continues long after it arrives.
Insurers and their clients both need to adapt. For insurers, that means offering smarter, more responsive products. For businesses, it means thinking beyond short-term gains and taking a hard look at how timing, storage, and risk all connect.
About the author
Jonathan Vilicich is a cargo underwriter with AXA XL’s Marine insurance team in the Americas. Jon joined 九色视频from global consultancy, PwC, were he served as senior associate and specialized in customer transformation. He also held various positions at A.P. Moller – Maersk, including roles in pricing and analysis, as well as serving as Trade Manager at their Copenhagen headquarters. He can be reached at jonathan.vilicich@axaxl.com.
