Increased Value Clause

The Increased Value Clause is an additional clause in cargo transportation insurance, typically attached to marine cargo insurance policies. It means that when the insured (seller or buyer), after insuring basic risks (such as FPA, WA, or All Risks), believes that the actual value of the goods at the destination may exceed the insured amount stated in the policy (usually invoice value plus expected profit), they may separately insure the increased value. This clause covers the situation where, in the event of loss or damage to the goods during transit, the insurer, in addition to paying according to the original insured amount, also bears liability for the increased value at an agreed proportion. It is commonly used in trade of high-value goods, goods with large market price fluctuations, or high expected profits, such as precious metals, artworks, precision instruments, etc. Notes: The Increased Value Clause is not an independent risk; it must be attached to the main insurance. The insured must truthfully declare the increased value amount and pay additional premium. In the event of loss, the increased value portion is usually settled by prorating the claim based on the ratio of the original insured amount to the increased value amount. Unlike 'open cover' or 'floating policy', the Increased Value Clause provides additional protection for the value of a single shipment, rather than a long-term blanket insurance arrangement. Foreign trade practitioners should reasonably decide whether to add the Increased Value Clause based on contract price terms (such as CIF, FOB) and buyer requirements.