International cargo transportation insurance clause negotiation examples and precautions

In international cargo transportation, negotiation of insurance clauses is an important step in ensuring smooth transportation. Such negotiations usually involve the insurance amount, insurance type, insurance premium and related documents, etc. The salesperson needs to clarify the ownership of the insurance liability when communicating with the customer.

Customer requests to change insurance coverage

In cross-border e-commerce B2B business, customers often make insurance-related requests. Under normal circumstances, unless the customer specifically requests it, the salesperson will insure the customer with the minimum level of insurance based on industry practice. When customers want to change insurance coverage, they need to respond promptly and make appropriate quotes. For example:

• Example customer email:

  Dear Tong,
  
  Have a good day!
  
  The last point before placing the order is the insurance. Could you please change from F.P.A to All Risks. We hope to do the best against any risks on the transportation. Will it affect the price?
  
  Best regards,
  XX
  

• Example of salesperson response:

  Dear XX,
  
  It is my pleasure to hear from you soon.
  
  That is no problem to change the insurance to All Risks. This is what we hope to suggest to you as well, considering the easily-changing weather recently and unpredictable political situation in your country. Because the price I have quoted to you is CIF price including sea transport insurance charge, we have to increase the price to USD XXX to cover the difference in the cost of the two different kinds of insurances.
  
  Attached is the quotation I have revised accordingly. I will draft a contract based on it with your confirmation of the quotation.
  
  Your quick reply will be highly appreciated.
  
  Yours faithfully,
  XXX
  

In the above scenario, the salesperson not only responded to the customer’s needs, but also provided advice on risks, demonstrating his professionalism.

Writing and precautions for insurance clauses

When writing insurance clauses, special attention needs to be paid to the following points:

1. Division of insurance liability:

   • In CFR and CPT contracts in Group F, Group E or Group C, it can be stated as “Insurance: to be covered by the buyer”.
   • In a contract concluded with Group D trade terms, it can be written as “Insurance: to be covered by the seller”.

2. Commonly used expressions of insurance terms:

   • Please cover the goods as described by us.
   • Please provide insurance for the goods in the schedule.
   • Please protect my goods worth US$55,000 from all risks with a minimum premium of no more than 10%.
   • For transactions on a CIF basis, we usually insure against all risks and war risks based on the invoice amount plus 10%.
   • The goods must be insured against all risks from warehouse to warehouse.

Through the above examples and precautions, salespeople can negotiate insurance terms more effectively to meet customer needs while reducing potential risks.