Cargo insurance is necessary as various laws limit the liability of transportation companies.
For example, the Hague Rules/Carriage of Goods by Sea Act (COGSA) limits the liability of shipowners to US$500 per unit, and also relieves shipowners of all liability in the event of one of 17 events occurring. These include war, acts of God, strikes, riots, acts of the pilot or crew, and attempts to save life at sea. For air carriers, the Warsaw Convention limits liability to US$9.07 per pound for international shipments and just US$0.50 per pound for domestic shipments.
As a shipper, you must insure your cargo to fully recover from a loss.