In FOB contracts, the seller undertakes to deliver the goods contracted for sale over the ship's rail where the risk passes from the seller to the buyer. On taking over the goods, it is the buyer who in addition to payment of freight also has to arrange for the insurance required in respect of the goods in transit. FOB contracts are generally sought by importers in a country who might have a marine open policy or open cover with their insurer which gives them the facility of declaration of goods imported by them to the insurer as and when such imports take place. Also the importers might have negotiated with their insurers the rates of premium which their overseas vendors might not be able to provide.