International Insurance in foreign trade specifically refers to risk protection for cross-border cargo transportation, engineering contracting, labor cooperation, and other international economic activities. The most common type is Cargo Insurance. Its core coverages include Free from Particular Average (FPA), With Average/With Particular Average (WA/WPA), and All Risks, with optional additional risks such as War Risk and Strikes Risk. Usage scenarios: Under CIF or CIP terms, the seller must arrange cargo insurance and pay the premium; under FOB or FCA, the buyer insures. Notes: The insured amount is usually 110% of the invoice value; the coverage must match the cargo characteristics and shipping route; the insurance policy date must not be later than the bill of lading date, otherwise the bank may refuse payment; claims require the policy, bill of lading, invoice, inspection report, etc. Difference from 'export credit insurance': the latter covers buyer commercial or political risks, while international cargo insurance mainly covers natural disasters and accidents during transit.
📝 Examples
1. According to the CIF terms, we have insured against All Risks and War Risk for 110% of the invoice value, and the original insurance policy will be submitted to the bank for negotiation together with the bill of lading. (Note: The seller fulfills the insurance obligation under CIF and meets the L/C requirements.)
2. As this batch of precision instruments is fragile, it is recommended that the buyer arrange insurance at its own expense under FOB terms for All Risks plus Risk of Breakage to cover potential risks during transit. (Note: The buyer arranges insurance under FOB and chooses appropriate coverage.)
💡 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
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
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