Failure to Deliver

Failure to Deliver is a special additional risk in cargo transportation insurance, primarily covering the risk that goods cannot be delivered to the destination due to abnormal reasons (such as the carrier disappearing, goods being seized, misdelivery to a non-destination, etc.). This type of insurance is commonly found under trade terms such as CFR and CIF, where the seller is responsible for arranging insurance, and either the buyer or the seller may take out the policy. It is typically used on routes involving political instability, shipping fraud, or carriers with poor creditworthiness. Notes: This risk usually requires addition to an All Risks policy, and the insurance liability takes effect after the goods are loaded on board and terminates upon delivery at the destination; if the goods have actually been lost but have not reached the state of "failure to deliver," compensation may not be payable. The difference from "Risk of Non-Delivery" is that the latter addresses the inability to take delivery of goods after they arrive at the port, whereas Failure to Deliver emphasizes that the goods never arrived at all. The difference from "War Risk" is that War Risk covers losses caused by acts of war, while Failure to Deliver covers a broader range of circumstances in which delivery cannot be made. When taking out the policy, the trigger conditions and compensation ratio must be clearly stipulated.