Responsibility for Insurance
International trade is potentially subject to a wide
range of hazards during transport, & so cargo
insurance plays an important role
The party responsible for the risk or damage to the
goods has a ‘primary insurable interest’
Incoterms are used to define responsibility for risk,
and only CIF and CIP place explicit obligations on
sellers to arrange cargo insurance
Conflicts may arise
ITC M10:A:7.1-1
, Transport & insurance obligations
under CIF Insurance
company
Cargo insurance Indemnify in
event of loss
policy or damage
Sales contract
Seller Shipping conditions Buyer
INCOTERM: CIF
Contract Deliver
of carriage the goods
Transport
operator(s)
ITC M10:A:7.1-2
International trade is potentially subject to a wide
range of hazards during transport, & so cargo
insurance plays an important role
The party responsible for the risk or damage to the
goods has a ‘primary insurable interest’
Incoterms are used to define responsibility for risk,
and only CIF and CIP place explicit obligations on
sellers to arrange cargo insurance
Conflicts may arise
ITC M10:A:7.1-1
, Transport & insurance obligations
under CIF Insurance
company
Cargo insurance Indemnify in
event of loss
policy or damage
Sales contract
Seller Shipping conditions Buyer
INCOTERM: CIF
Contract Deliver
of carriage the goods
Transport
operator(s)
ITC M10:A:7.1-2
