Is it insured on the way?
It should be, on all-risks terms, for what it costs you landed. A factory quote that says CIF only has to include the most basic cover, and that is often not enough.
The short answer
Insure the cargo yourself, on Institute Cargo Clauses (A), warehouse to warehouse, for at least the goods plus freight plus 10%. Do not rely on the factory's CIF cover.
The proof
- Under Incoterms 2020 CIF, the seller only has to insure to Institute Cargo Clauses (C), a minimum cover for named events tied to the ship.
- Under CIP, the seller must insure to Clauses (A), all risks, at the contract price plus 10%.
- Australian landed costs often exceed CIF plus 10%, so even correct CIF cover can leave you under-insured. Brokers commonly recommend buying CFR and arranging your own cover.
- General average: if a ship has a casualty, every cargo owner shares the cost before cargo is released. Insured cargo is guaranteed by the insurer. Uninsured owners pay a cash deposit, and in one case it reached about 54% of cargo value. One uninsured consignee can hold up a whole shared container.
What Elje does about it
- Every Project Plan specifies the Incoterm and the cargo cover: Clauses (A), warehouse to warehouse, for the full landed value.
- The forwarder in the plan arranges cover if the factory does not.
- We do not put an uninsured consignment in a shared container.
Questions
What does cargo insurance cost?
The forwarder quotes it in the Project Plan as its own line, so you see the premium before you order.
Does it cover damage I find when I unpack?
All-risks cover usually does, subject to exclusions such as poor packing. Photograph the cartons on delivery and before you open them.