Which statement about cargo insurance is TRUE?

• A. It covers all losses regardless of cause.
• B. It covers only shipments stored in warehouses.
• C. It provides health insurance for drivers.
• D. It covers goods in transit against loss or damage.

Answer: (D)

Cargo insurance protects goods while they are moving from one place to another. It covers loss or damage to the items during transit due to risks that can occur on the road, in the air, or at sea—things like theft, fire, collision, or weather-related damage. This makes the statement that it covers goods in transit against loss or damage the true one.

It isn’t all-encompassing for every possible loss—policies usually have exclusions such as war, strikes, improper packaging, or wear and tear. It also isn’t about health coverage for drivers, and it isn’t about shipments stored in warehouses, which would fall under storage or warehouse insurance.