Co-insurance

Co-insurance refers to an insurance arrangement in which two or more insurers jointly underwrite the same subject matter of insurance, the same insurable interest, and the same insured peril, with each insurer bearing liability for indemnity in agreed proportions. In foreign trade, it is commonly used for large cargo transportation, engineering projects, or exports of high-value equipment, where the insured amount is so large that a single insurer is unwilling or unable to underwrite independently, so multiple companies co-insure proportionally. Use scenarios include: huge cargo under international cargo insurance, large accounts receivable under export credit insurance, overseas engineering all risks, etc. Points to note: co-insurers share indemnity proportionally, and the insured must claim against all co-insurers; unlike reinsurance, co-insurance is a horizontal sharing at the original insurance level, whereas reinsurance is a vertical transfer of risk from the insurer to the reinsurer; unlike double insurance, co-insurance involves each insurer knowingly underwriting in agreed proportions, whereas double insurance may result from the applicant's oversight leading to over-insurance, and the total indemnity from all insurers must not exceed the insured value. Foreign trade practitioners should specify the co-insurance proportions, lead insurer, and claims procedure in the contract.