Incoterms
The ICC rules that set where risk passes and who, if anyone, must insure.
Definition
Eleven trade terms published by the International Chamber of Commerce, current edition Incoterms 2020, allocating cost, risk and obligations between seller and buyer. Only two of the eleven oblige anybody to insure: CIF, at a minimum of Institute Cargo Clauses (C), and CIP, which Incoterms 2020 raised to Clauses (A). Both require at least 110% of the contract value, in the contract currency.
Why it decides money
Under the other nine rules nobody is obliged to insure. That is where uninsured legs come from: each side assumes the other did it.
Related terms
- CIF plus 10%
- The customary basis of valuation: cost, insurance, freight and a tenth on top.
- UCP 600
- The letter-of-credit rules, including what an insurance document must show.
- Certificate of insurance
- Evidence that a named shipment is covered under a policy.
More in carriage and documents
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