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CIF - a Term of Sale where the seller has the same obligations as under the CFR but also has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.



Related Terms

COST AND FREIGHT

CFR - a Term of Sale where the seller pays the costs and freight necessary to bring the goods to the named port of destination, Terms of Sale but the risk of loss of or damage to the goods, as (continued) well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. The CFR term requires the seller to clear the goods for export.

CIP

(Carriage and Insurance Paid To) - a Term of Sale which means the seller has the same obligations as under CPT, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The CIP term requires the seller to clear the goods for export.

CARRIAGE AND INSURANCE PAID TO

CIP - a Term of Sale which means the seller has the same obligations as under CPT, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The CIP term requires the seller to clear the goods for export.

CARRIAGE PAID TO

CPT - a Term of Sale which means the seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. If subsequent carriers are used for the carriage to the agreed upon destination, the risk passes when the goods have been delivered to the rst carrier. The CPT term requires the seller to clear the goods for export.

MARINE INSURANCE

Broadly, insurance covering loss or damage of goods at sea. Marine insurance typically compensates the owner of merchandise for losses sustained from re, shipwreck, etc., but excludes losses that can be recovered from the carrier.

OPEN INSURANCE POLICY

A marine insurance policy that applies to all shipments made by an exporter over a period of time rather than to one shipment only.

DELIVERED DUTY UNPAID

DDU - a Term of Sale where the seller ful lls his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by failure to clear the goods for in time.

GENERAL AVERAGE

When a cargo loss occurs and general average is declared during a voyage, especially when there are multiple shippers and commodities, the amount of the total loss is averaged against all the cargo on the vessel based on a valuation formula. The settlement of the claims are paid by each and every shipper or their insurance carrier based on the average. A shipper, or their insurance carrier, may have to pay a share of a partial loss to others who had a loss or damage claim even when their own cargo may not have incurred any of the same damage or loss.

INHERENT VICE

An insurance term referring to any defect or other characteristic of a product that could result in damage to the product without external cause (for example, instability in a chemical that could cause it to explode spontaneously). Insurance policies may exclude inherent vice losses.

FREE OF PARTICULAR AVERAGE

A marine insurance term meaning that the assurer will not allow payment for partial loss or damage to cargo shipments except in certain circumstances, such as stranding, sinking, collision or fire.

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