Trade terms and customer insurance

      In the process of international trade, because the buyer and the seller belong to different countries and regions, considering that there are often certain risks in the process of transportation of goods, in the process of signing the sales contract, the two sides will discuss insurance issues, including the insurance amount, insurance type, who handles the insurance, the insured and so on。
 

 

Trade terms and customer insurance

 

      When entering into an international freight contract with an insurance company, the first principle to be determined is the insurable interest principle。The applicant has an insurable interest in the subject matter insured。If the insured has no insurable interest in the subject matter insured, the insurance contract is invalid, which is the insurable interest principle。However, in the international freight insurance business, the insured is not required to have an insurable interest at the time of the insurance。Due to trade terms such as FOB, FCA, only the seller has an insurable interest, while the buyer has no insurable interest until the goods are actually shipped or the carrier completes the delivery of the transfer of risk。If it is compulsory, the buyer cannot insure the goods in time before shipment。Therefore, as long as the buyer has the expected insurance benefit, it can be insured。

 

      In addition to the two trade terms CIF and CIP, the seller must be insured。Insurance for other trade terms shall be decided by the buyer and the seller, and is not compulsory。In this case, whoever bears the risk of the goods for a specific period of time and has an insurable interest in the goods during that period can choose whether or not to be insured。The insured of the policy is the policyholder himself。When the parties choose to insure, it means that the safety of the goods is related to the vital interests of the parties, and the parties choose to insure their own interests to prevent possible losses of the goods in the course of transportation。