Insurance Terminology

Insurance terminology refers to the specialized vocabulary related to cargo transportation insurance in international trade, covering aspects such as application for insurance, underwriting, and claims settlement. Common terms include: Insurer, Applicant, Insured, Policy, Certificate, Insured Amount, Premium, Coverage, FPA (Free from Particular Average), WPA (With Particular Average), All Risks, Warehouse to Warehouse Clause, Franchise, Claim, etc. Usage scenarios mainly involve trade terms such as CIF and CIP where the seller is responsible for insurance, as well as FOB and CFR where the buyer arranges insurance independently. Precautions: Coverage varies greatly among different risks, so selection should be based on cargo characteristics and transportation routes; the insured amount is typically 110% of the invoice value; when applying for insurance, the coverage, percentage markup, and claim settlement location should be clearly specified. Difference from other terms: Insurance terminology focuses on risk transfer and loss compensation, while trade terms (such as FOB, CIF) define the division of responsibilities, costs, and risks between buyer and seller. Mastering insurance terminology helps mitigate trade risks and ensure cargo safety and fund recovery.