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Ocean Cargo Terms of Sale (Summary)
 

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

TERM

SELLER

BUYER

ATTACHMENT

TERMINATION

EXW

 

X

Place of origin

Place of destination

FCA

 

X

Named point-
Country of shipment

Place of destination

FOB

 

X

Onboard vessel
port of shipment

Place of destination

FAS

 

X

Alongside vessel
port of shipment

Place of destination

CFR

 

X

Onboard vessel
port of shipment

Place of destination

CIF

X

 

Place of origin

Named place of destination, or port of destination

CPT

 

X

Named point/place
Country of shipment

Named point of destination

CIP

X

 

Place of origin

Named point/place of destination

DAF

 

 

Not automatic

Not automatic

DES

X

 

Place of origin

Onboard vessel port of destination

DEQ

X

 

Place of origin

On quay port of destination

DDU

X

 

Place of origin

Named point/place of destination

DDP

X

 

Place of origin

Named point/place of destination

Note:

  1. 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.
  2. Under terms which stipulate a named place, the invoice or other sale document must clearly state where that place is.
  3. 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 instances, 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.