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Cargo insurance

Insured Value

In Indonesian: Nilai Pertanggungan

Insured value is the amount agreed in the policy as the basis for indemnity. Common practice, and the Incoterms 2020 minimum for CIF and CIP, is 110% of the contract value, meaning the CIF value plus 10% to cover expenses and lost profit. For example, a CIF contract of USD 10,000 is insured for at least USD 11,000. Too low a value leads to underinsurance, and claims are then paid proportionally.

Related terms

  • Cargo Insurance (Marine Cargo Insurance)

    Cargo insurance protects the cargo owner against loss of or damage to goods during sea, air or land transport.

  • 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.

  • Total Loss

    A total loss occurs when goods are entirely lost or so damaged that they no longer are the thing insured, called an actual total loss.

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