Ocean Cargo Terms of Sale (Summary)

Summary of Point of attachment and termination of insurance under Open Policies based on Terms of Sale

Note:

• Under CIF and CIP terms, the seller must provide insurance for the account of the buyer regardless of where his responsibility for loss or damage ceases.
• Under terms which stipulate a named place, the invoice or other sale document must clearly state where that place is.
• Loss or damage which occurs during transit prior to attachment of insurance under an Open Policy or subsequent to termination of the insurance would be for the account of the other party, not the Open Policy assured. Non-payment of the purchase price by the buyer in these moments, while rare, leaves the assured without recourse against their Open Policy. Additionally, the buyer who has paid for the merchandise prior to receiving it may encounter difficulties obtaining either replacement merchandise or refunds of their purchase price, again without recourse against their Open Policy. Chubb's Open Policy, however, provides automatic "contingent" insurance for its assureds in these situation, unlike most other cargo insurance policies; provided the shipment has been insured under its policy for the overseas shipment.