An insurance covering cargoes carried by ships, aircraft, or other forms of transport. In a Free On Board (FOB) contract the responsibility for insuring the goods for the voyage rests with the buyer. The seller's responsibility ends once the goods have been loaded. In a Cost and Freight (CFR) contract the buyer is likewise responsible for insurance, even though the seller arranges the shipment and pays the freight: if it is specified that the seller pays for insurance, this is a Cost Insurance and Freight (CIF) contract. Under a Delivered Ex Ship (DES) contract, insurance is the responsibility of the seller up to the port of destination. See Incoterms. See also average; floating policy; open cover.
Subjects: Business and Management.