Marine Cargo Insurance

Marine Cargo Insurance refers to a type of property insurance in which the insurer (insurance company) is liable to compensate for losses and expenses incurred by the insured cargo during sea transportation due to natural disasters, accidents, etc. It is an indispensable risk management tool in international trade, especially under CIF (Cost, Insurance and Freight) or CIP (Carriage and Insurance Paid To) terms, where the seller is obliged to insure for the buyer. Usage scenarios include: importers and exporters insuring cargo to mitigate transportation risks; banks requiring the presentation of an insurance policy as a negotiating document in letter of credit transactions. Precautions: It is necessary to specify the insurance coverage (e.g., Free from Particular Average, With Particular Average, All Risks), the insured amount (usually 110% of the invoice value), the commencement and termination of insurance liability (warehouse to warehouse clause), and exclusions. Unlike other terms such as 'carrier's liability', marine cargo insurance is an independent commercial insurance with broader coverage and does not depend on whether the carrier compensates. In addition, a distinction should be made between an 'insurance policy' and an 'insurance certificate'; the former is transferable, while the latter is not.