Cargo Insurance (Marine Cargo Insurance)
Cargo insurance protects the cargo owner against loss of or damage to goods during sea, air or land transport. A carrier's liability is usually limited by contract and conventions, so its compensation is often far below the goods' value. Who must insure depends on the Incoterms rule: the seller under CIF and CIP, the buyer under FOB and FCA. Cover usually refers to the Institute Cargo Clauses. Premiums vary by commodity, route and packing, so ask for a formal quote.
Related terms
- Institute Cargo Clauses (ICC A, B, C)
The Institute Cargo Clauses are the London market's standard wordings for cargo policies, with the 2009 edition the most widely used.
- Insured Value
Insured value is the amount agreed in the policy as the basis for indemnity.
- CIF (Cost, Insurance and Freight)
CIF works like CFR, but the seller must also take out cargo insurance for the buyer, at least at Institute Cargo Clauses (C) level and for at least 110% of the contract value.
- CIP (Carriage and Insurance Paid To)
CIP works like CPT, but the seller must also insure the cargo for the buyer.
- All Risks Cover
All risks is a cargo cover against all physical loss or damage from external causes except those expressly excluded, normally based on Institute Cargo Clauses (A).