I N S U R A N C E
Damaging weather conditions, rough handling by carriers, and other common hazards to
cargo make insurance an important protection for U.S. exporters. If the terms of sale make
you responsible for insurance, your company should either obtain its own policy or insure
the cargo under a freight forwarder’s policy for a fee. If the terms of sale make the foreign
buyer responsible, you should not assume (or even take the buyer’s word) that adequate
insurance has been obtained. If the buyer neglects to obtain adequate coverage, damage to
the cargo may cause a major financial loss to your company.
Shipments by sea are covered by marine cargo insurance. Air shipments may also
be covered by marine cargo insurance, or insurance may be purchased from the air carrier.
Export shipments are usually covered by cargo insurance against loss, damage, and delay
in transit. International agreements often limit carrier liability. Additionally, the coverage is
substantially different from domestic coverage. Arrangements for insurance may be made
by either the buyer or the seller in accordance with the terms of sale. Exporters are advised
to consult with international insurance carriers or freight forwarders for more information.
Although sellers and buyers can agree to different components, coverage is usually placed at
110 percent of the CIF (cost, insurance, freight) or CIP (carriage and insurance paid to) value.