Insurance for Exporting
"marine insurance" is a contract between one party and another party in return for the payment of a fee by the exporter and the insurance company agrees to reimburse the insured in full or in part for any financial loss suffered.

The Need for Marine Insurance

The cost of marine insurance is quite small compared with the cost of the goods shipped and the freight charges involved. Therefore, the benefit of the marine insurance, in terms of financial reimbursement if disaster strikes, is usually well worth the cost.

Not much help can be expected from the shipping company for the exporter, if the goods are damaged or lost, even while in its care.

Various statutes, plus the printed clauses in ocean bills of lading the contract between the shipper and the carrier, limit the liability of the shipping company for such losses.

In order to recover losses from the carrier, the exporter must be able to prove "want of due diligence", in other words, the shipping company was negligent.

It is difficult for an exporter to prove at what point damage or loss occurred. However, a marine insurance policy is often arranged on a "warehouse-to-warehouse" basis.

In other words, the risk of financial loss from damage or loss occurring during inland transit in the exporting country and abroad as well as during ocean shipment.

Such a policy relieves the exporter of the burden of proving when or where any loss actually occurred... Read more

Insurance for Exporting

What is Marine Insurance Defined?

Why do we need Marine Insurance?

Who is Responsible for Insurance?

Advantage for arranging Insurance

Responsibility for Insurance
Very often, the exporter will quote a C.I.F. price to its foreign customer.

This is an export price that includes the cost of the goods, the insurance and the freight, to a named point of destination.

If the quotation is accepted (see Export Contract) the exporter will automatically be responsible for arranging the marine insurance.

Even though the export price may be F.A.S. (free along side, named point of shipment), the exporter may still be responsible for arranging the marine insurance.

This would be so if the exporter has made it one of the terms of the "export sales contract".

In this case, the cost of the insurance would be billed as a separate expense, additional to the F.A.S. or F.O.B. sales price. Such insurance might include war risk insurance as well as straight marine insurance... Read more