Recovery of Insurance refers to the right, in foreign trade cargo transportation insurance, of the insurer to recover from third-party liable parties (such as carriers, ports, warehouses, etc.) after paying compensation to the insured for losses within the scope of insurance liability. This term is commonly used under trade terms such as CIF and CIP where the seller arranges insurance; after compensating the buyer, the seller may recover the insurance payment from the liable party. Usage scenarios include: goods damaged during transport due to carrier negligence, where the insurer compensates and then recovers from the carrier; or the buyer arranges insurance under FOB and, after compensation, recovers from the seller. Notes: The recovery time limit is subject to maritime law or relevant laws (usually 1 year), and a complete evidence chain must be retained; unlike 'subrogation', recovery of insurance emphasizes the insurer actively recovering the compensation already paid, rather than merely acquiring the right. It differs from 'recourse' in that recourse broadly refers to all recovery actions, while recovery of insurance specifically refers to recovery after insurance compensation. Foreign trade practitioners should clarify the responsible party for insurance to avoid losses caused by difficulties in recovery.
📝 Examples
1. Under a CIF contract, due to improper stowage by the carrier, the goods were damaged. After the insurance company compensated the buyer, it pursued recovery of insurance from the carrier and ultimately recovered 80% of the compensation. (Note: The insurer exercises subrogation, and the seller must cooperate by providing documents such as the bill of lading.)
2. The buyer arranged insurance under FOB. When the goods were damaged during unloading at the destination port due to operational error by the port, the insurance company, after compensation, initiated recovery of insurance procedures and claimed against the port operator. (Note: The buyer must promptly notify the insurer and retain unloading records.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
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