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Cargo Insurance

From United States of America
To India
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Nov 27, 2020

What is Cargo (Marine) Insurance?

1 answer

Nov 27, 2020

The term cargo insurance, popularly known as marine insurance, applies to all modes of transportation. The need for export (or import) cargo insurance often differs from exporter to exporter (or importer to importer) and from consignment to consignment. Unless the insurance is mandatory in a trade term, the exporter or the importer may opt not to insure the goods at his/her own risks. Depending on the international commercial terms, either the seller (the exporter) or the buyer (the importer) is responsible for insuring the cargo. The seller is obligated to insure the cargo in the CIF (Cost Insurance and Freight) and CIP (Carriage and Insurance paid) terms. The seller may opt not to insure the cargo at his/her own risks in the DDU (Delivered Duty Unpaid) and DDP (Delivered Duty Paid) terms. The trade terms DDU and DDP are often used in the turnkey projects where the amount at stake is large. In practice, the seller usually insures the cargo in the DDU and DDP terms.

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