Import cargo insurance is arranged by the buyer obtaining a policy from an insurance company before the goods are loaded, under delivery terms in which the seller has no obligation to insure. The sum insured in the policy is usually stated as the CIF value plus 10 per cent, the cover is selected from the ICC (A), (B) or (C) clauses, and the insurance is set up with warehouse-to-warehouse cover.
Who takes out the insurance?
The answer lies in the Incoterms rule in the sales contract. When buying under EXW, FCA, FAS, FOB, CFR and CPT, the seller has no obligation to insure; most of the transport risk lies with the buyer, and the importer takes out the policy. Under CIF and CIP, the seller is obliged to insure in favour of the buyer. Under Incoterms 2020, the minimum cover for CIF is the narrow ICC (C) clause and for CIP the broad ICC (A) clause; under both rules the minimum sum insured is 110 per cent of the contract price. All rules are compared in a table under the heading Incoterms and insurance responsibility.
Article 15 of the Insurance Law (Sigortacılık Kanunu) recognises that cargo insurance for goods subject to export and import may also be taken out abroad. A foreign policy is therefore legally possible; obtaining a policy in Türkiye, however, makes the claims process, language and contact person easier. Details are in the entry on whether import insurance is mandatory.
Taking out a policy step by step
- Determine the delivery term and the point at which risk passes. The point at which risk passes to you shows where the policy must start.
- Collect the information: proforma or commercial invoice, description and packaging of the goods, weight, place of loading and destination, mode of transport, estimated loading date.
- Calculate the sum insured. In practice, the sum insured is stated as 110 per cent of the CIF value, i.e. the total of the price of the goods, freight and insurance. The additional 10 per cent covers expected profit and additional costs. The calculation is illustrated in the entry on the sum insured.
- Choose the scope of cover. For general cargo, ICC (A) is usually preferred; war and strike risks are added with separate clauses.
- Have the policy issued before loading begins. Article 1458 of the TTK permits retroactive insurance; however, the contract is invalid if the occurrence of the loss was known at the time the contract was concluded.
- Keep the documents: the policy or insurance certificate, bill of lading or CMR, packing list and invoice form the basis of the claim file.
The difference between ICC (A), (B) and (C)
| Clause | Scope logic | Typical use |
|---|---|---|
| ICC (A) | All risks except the exclusions | Machinery, electronics, consumer goods, general cargo |
| ICC (B) | Named risks; in addition to (C), risks such as earthquake and entry of sea water | Durable goods with low damage risk |
| ICC (C) | Major casualties such as fire, sinking, stranding and collision | Bulk and low-value cargo |
For a detailed comparison that also shows the risks not covered, see the heading ICC (A), (B), (C) clauses.
When does the policy start and when does it end?
The "transit" clause in the ICC clauses provides warehouse-to-warehouse cover: the cover begins when the goods are first moved in the warehouse for the purpose of loading in order to commence the transit, and ends when unloading is completed at the destination warehouse named in the policy or when the time limit in the clause expires. If the delivery term shows that risk passes later, for example in an FOB purchase, the pre-loading part is in any case at the seller's risk. Insurance also matters for customs value: under Article 27 of the Customs Law (Gümrük Kanunu), the cost of insurance up to the place of entry into Türkiye is added to the value.
Common mistakes
- Considering the seller's (C) cover sufficient in a CIF purchase; theft and handling damage may be left uncovered.
- Requesting the policy after the goods are already on their way.
- Leaving the final domestic leg, i.e. transport from customs to the factory, outside the scope of cover.
How does Voltim Global support you?
Voltim Global does not issue policies; it arranges international transport insurance cover through partner insurance companies and agencies. The loading date, route and transhipment details from the transport plan are passed on to the insurer so that the start of the policy is aligned with the transport.