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Incoterms Insurance
Checker

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Answer 3 simple questions about your trade terms and find out instantly who is responsible for cargo insurance — and whether your shipment has a dangerous coverage gap.

  • Covers all 11 Incoterms 2020 — buyer and seller paths
  • Instant result: who insures, where risk transfers
  • Identifies coverage gaps most traders don't know they have
  • Free to use — no registration required
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MAS

Licensed Brokerage
(AWE Global Pte Ltd)

0

Incoterms 2020
Covered

10 +

Active Clients
Protected

99.2%

Claims Satisfaction
Rate

Check Your Insurance Position</strong

Answer 3 questions about your role, trade terms, and freight arrangement. The checker identifies your Incoterm and shows you exactly where you stand — in under a minute.

Do I Need Cargo Insurance? | CargoInsurePro
Your Progress Step 1
In this shipment, are you the buyer or the seller?
This determines which side of the insurance equation you're on.
Who pays for the main shipping cost?
This is the ocean freight, airfreight, or trucking cost — the big transport charge, not local pickup. Check your sales contract or invoice.
Where does the seller hand over responsibility to you?
Think about what the seller does before you take over — does their job end at their door, at the port, or when goods are loaded on the ship?
How far does your delivery obligation go?
As the seller paying freight — does your obligation end when you hand over to the carrier, or do you deliver all the way to the buyer's location?
Who handles import customs and duties in the buyer's country?
Import duties, taxes, and customs clearance at the destination — who takes care of this?
Do you unload the goods at the destination?
Are you responsible for physically unloading at the destination point, or do you just deliver and the buyer handles unloading?
What is the main transport mode for this shipment?
This affects which specific trade terms apply.
Do you (the seller) arrange cargo insurance for this shipment?
Check your sales contract — does it say you provide insurance? Terms like "CIF" or "CIP" mean you do.
✅ Details sent — showing your result now

How the Checker Works

No Incoterms knowledge required. Just answer what you know about your shipment and we’ll do the rest.

Tell Us Your Role

Are you the buyer or the seller? This determines which side of the risk equation you're on and shapes the questions that follow.

Describe Your Trade Terms

Answer 2–3 plain-language questions about who pays freight, how far delivery goes, and whether insurance is included. No jargon — we translate for you.

Get Your Result

See your identified Incoterm, who bears the insurance responsibility, exactly where risk transfers, and what action you should take — with a direct link to get covered.

Why Incoterms Determine Your Coverage

Most cargo losses go uninsured not because traders skip insurance — but because they misread who was supposed to arrange it.

The Incoterm in your contract decides everything

Every international trade transaction is governed by an Incoterm — a three-letter code that defines exactly where the seller’s responsibility ends and the buyer’s begins. That transfer point determines who bears the financial risk of loss or damage during transit, and therefore who needs cargo insurance.

The problem is that Incoterms are widely misunderstood. A buyer trading on FOB terms may assume their supplier’s shipment is “covered.” A seller on CFR terms may think paying the freight means they’re also on the hook for insurance. Neither is true — and the gap between assumption and reality is where uninsured losses happen.

This checker eliminates the guesswork. Answer a few questions about your shipment and we’ll tell you exactly where you stand — and what to do about it.

The most common misconception in international trade

“The seller paid the freight, so I assumed I was covered.” Under CFR and CPT terms, the seller pays freight to your destination — but risk transfers when goods leave the origin port. If something happens at sea, it's the buyer's loss. The seller paying freight does not mean the buyer is insured.

FOB — Risk transfers at the vessel, not at delivery

FOB is the most common Incoterm in Asian trade. The moment goods are loaded on board at the origin port, the entire ocean voyage is at the buyer's risk. Many buyers believe the seller's booking of the shipping line means some coverage applies — it doesn't.

Buyer must insure

CIF — Insurance is provided, but only at minimum standard

Under CIF, sellers must provide cargo insurance — but only ICC (C), the minimum level. This covers fire and sinking but not theft, handling damage, or contamination. Most CIF buyers don't know this until a claim is rejected.

Top-up strongly recommended

EXW — Buyer responsible from the factory gate

EXW places maximum responsibility on the buyer. Insurance must activate from the moment goods are made available at the seller's premises — including export customs, loading, and the full transit. It is the least understood and most underinsured Incoterm.

Buyer responsible from day 1

All 11 Incoterms 2020 — Insurance at a Glance

A complete reference showing who is responsible for insurance, where risk transfers, and what action to take under each Incoterm.

Incoterm
Full Name
Mode
Who Insures
Risk Transfers At
Recommended Action
EXW
Ex Works
Any
Buyer
Seller’s premises
Buyer must insure
FCA
Free Carrier
Any
Buyer
Named carrier / forwarder
Buyer must insure
CPT
Carriage Paid To
Any
Buyer
First carrier handover
Buyer must insure
CIP
Carriage & Insurance Paid To
Any
Seller (ICC A)
First carrier handover
Verify seller’s policy
DAP
Delivered at Place
Any
Seller
Named destination
Verify seller’s policy
DPU
Delivered at Place Unloaded
Any
Seller
After unloading at destination
Verify unloading cover
DDP
Delivered Duty Paid
Any
Seller
Buyer’s named destination
Request proof of cover
FAS
Free Alongside Ship
Sea only
Buyer
Alongside vessel at origin port
Buyer must insure
FOB
Free On Board
Sea only
Buyer
On board vessel at origin port
Buyer must insure
CFR
Cost & Freight
Sea only
Buyer
On board vessel at origin port
Buyer must insure
CIF
Cost, Insurance & Freight
Sea only
Seller (ICC C min.)
On board vessel at origin port
Top-up to ICC (A) advised

Note on CIP vs CIF: Under Incoterms 2020, CIP was updated to require ICC (A) all-risks cover — a significant upgrade from the previous ICC (C) minimum. CIF still requires only ICC (C) minimum. Always request a copy of the insurance certificate to verify what standard has been arranged.

The 3 Most Common Coverage Mistakes

These three Incoterms account for the majority of uninsured cargo losses we see. If your shipment falls under any of these, act now.

FOB

Free On Board

  • ⚠ Most common gap

Buyer assumes they're covered. They're not.

FOB is the dominant Incoterm in Asian trade — used in the majority of shipments from China, Vietnam, Thailand, and India. Buyers often interpret the seller's booking of the shipping line as meaning the shipment is covered. It isn't. The moment goods are on board the vessel, the entire ocean voyage is at the buyer's risk. The shipping line's liability is capped at around USD 500 per package under international conventions — far below most shipment values.

Buyers trading on FOB must arrange their own cargo insurance before loading begins.

CFR

Cost & Freight

  • ⚠ Most misunderstood

“The seller paid the freight, so I must be covered.”

CFR creates the most dangerous misconception in international shipping. The seller pays ocean freight all the way to the buyer's destination port — so the buyer naturally assumes their goods are protected for that journey. They are not. Under CFR, risk transfers when goods go on board at the origin port, exactly the same as FOB. The seller paying the freight bill has no bearing on who bears the risk of loss.

CFR buyers must arrange their own cargo insurance, even though they pay no freight.

CIF

Cost, Insurance & Freight

  • ⚡ Partial cover only

“I have CIF — I'm fully insured.” Not quite.

CIF is the only common Incoterm that requires the seller to provide insurance — but what buyers receive is ICC (C), the bare minimum. It covers catastrophic perils like fire and sinking but not theft, handling damage, denting, scratching, contamination, or leakage. These are among the most common cargo claims. A buyer whose electronics arrive with moisture damage under CIF will typically find their claim rejected.

CIF buyers should request the policy details and arrange a top-up to ICC (A) all-risks.

Incoterms Insurance FAQs

The questions our broker team gets asked most often — answered clearly, without the jargon.

01. Under FOB terms, who is responsible for cargo insurance?

Under FOB (Free On Board), the buyer is responsible for cargo insurance. Risk transfers from seller to buyer the moment goods are loaded on board the vessel at the origin port. Everything from that point — the entire ocean voyage and onward delivery — is at the buyer’s risk. FOB shipments without buyer-arranged cargo insurance are one of the most common sources of uninsured losses in international trade.

Not always. Under CIF, the seller is required to provide cargo insurance — but only at the minimum standard: Institute Cargo Clauses (C). This covers only major perils like fire, sinking, and stranding. It does not cover theft, handling damage, contamination, or many other common losses. Many CIF buyers assume they are fully covered and are surprised when claims are rejected. Upgrading to ICC (A) all-risks is strongly recommended — our broker team can arrange this at a modest additional cost.

Both CIF and CIP require the seller to arrange cargo insurance, but at different standards. CIF (sea and inland waterway only) requires a minimum of ICC (C) cover. CIP (any transport mode), updated under Incoterms 2020, now requires ICC (A) all-risks cover — a significantly higher standard. Always request a copy of the insurance certificate to verify what standard has been arranged.

No — and this is one of the most dangerous misconceptions in freight. Freight forwarder liability insurance covers the forwarder’s legal liability for their own errors and negligence, not the value of your goods. If your cargo is lost or damaged due to a carrier accident, weather, theft, or handling, the forwarder’s liability policy will not pay your cargo claim. You need your own cargo insurance policy, regardless of your Incoterm.

Under EXW (Ex Works), the buyer bears all risk and is responsible for arranging cargo insurance from the moment goods are made available at the seller’s premises. This is the maximum obligation for a buyer — you are responsible for export customs, loading onto the first vehicle, the full transit, and import. Comprehensive all-risks coverage (ICC A) is essential and should be arranged before pickup.

Yes. As a MAS-licensed marine cargo insurance brokerage, we arrange coverage for buyers and sellers under any Incoterm — whether you need coverage from the seller’s factory under EXW, from the port of loading under FOB, or a top-up to the minimum cover your seller provides under CIF. Contact our broker team via WhatsApp or email for a quote tailored to your specific trade terms and shipment.

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