Not to Inure Clause

The Not to Inure Clause is a common clause in international trade and marine insurance, typically found in cargo transportation insurance policies or letters of credit. Its core meaning is that the insurance benefits do not automatically transfer to other parties (such as the buyer or consignee) due to the insured's (e.g., seller or carrier) act of insuring, i.e., 'not to inure to the benefit of others.' It is commonly used in trade terms such as CFR and CIF where the seller arranges insurance, and the seller requests the insurer to include this clause to prevent the buyer from obtaining insurance compensation before paying for the goods. Precautions: This clause may affect the buyer's direct right to claim after a loss, and must be coordinated with letter of credit terms; if the letter of credit requires the insurance policy to be issued to the buyer, this clause may cause discrepancies. It is the opposite of the 'To Inure Clause,' which explicitly transfers insurance benefits to a designated party. The difference is: the Not to Inure Clause restricts the automatic transfer of insurance benefits, while the To Inure Clause actively grants a third party the right to claim. Foreign trade practitioners should handle it prudently to avoid claim difficulties or document rejection due to clause conflicts.