Insurance Coverage

Insurance Coverage is a core step in cargo transport insurance in international trade. It refers to the buyer or seller, as stipulated in the contract, purchasing protection from an insurance company for risks during the transport of goods. The applicable scenario mainly depends on the trade term: under CIF or CIP, the seller is responsible for arranging insurance and paying the premium; under FOB or FCA, the buyer arranges insurance itself. Precautions include: the insurance coverage must match the nature of the goods and the shipping route (e.g., FPA, WA, All Risks), the insured amount is usually 110% of the invoice value, and the claim settlement location and currency must be specified. Difference from 'insurance' and 'underwriting': insurance coverage emphasizes the act of arranging insurance, underwriting is the insurer's acceptance of risk, and insurance broadly refers to the entire protection mechanism. Foreign trade practitioners should ensure the policy date is no later than the shipment date, and pay attention to deductibles and exclusions to avoid claim failure due to missed or incorrect coverage.