How to buy insurance for goods using sea freight

The liability of a shipping company for the goods it transports is governed by various international conventions and is not always equal to the full value of the goods, which is why it is important to ensure that you have your own insurance.

Marine transportation insurance does not only cover ocean freight; it also covers the transportation of goods by road, rail or air. To ensure that your insurance is valid, you need to prove that you have an insurable interest in the goods, that is, that the goods belong to you.

International trade involves a number of risks, such as loss, damage and delays (such as customs detention). Learn more about how risk is shared between buyers and sellers before using insurance.

In the ex-factory process, once the goods are picked up from the factory or warehouse, the seller is considered to have delivered the goods. So from then on, all risk passes to the buyer, so the buyer needs to make sure the goods are insured from then on.

Incoterms are a standard set of terms that detail when liability for costs and risks passes from the seller to the buyer, and can affect the cost of your insurance because the more costs you incur, the more coverage you need.

In a Delivery Duty Paid (DDP) sale, the risk does not pass to the buyer until the goods arrive at the destination and clear customs. In this case, the seller needs to insure the goods before the risk passes to the buyer.

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