Insured Amount

Insured Amount is a core term in foreign trade cargo transportation insurance. It refers to the value of the insured subject matter declared by the insured to the insurance company at the time of insurance, and it is also the maximum limit of the insurance company's liability for compensation and the basis for calculating the insurance premium. According to international practice (such as UCP600 and INCOTERMS), the insured amount is usually set at 110% of the invoice value, i.e., invoice value plus 10%, to cover the buyer's expected profit and import costs. It is commonly used in letter of credit settlement and in the exporter's insurance arrangement under CIF/CIP trade terms. Note: If the letter of credit does not clearly specify the insured amount, banks may accept a policy with a minimum of 110% of the invoice value; if the goods involve multiple invoices or different risks, the amount must be calculated separately. Difference from other terms: Insured Amount is different from Insured Value, which refers to the actual value of the insured subject matter; it is also different from Indemnity, which is compensation after actual loss but not exceeding the insured amount. In addition, the insured amount must be consistent with the invoice value and trade terms to avoid claim disputes caused by insufficient amount.