Benefits of Cost Insurance Freight Agreement to the Seller

International shipping is far more complex than inland trade. The stakes are higher and many components are involved like shipping, theft, insurance, storage, etc., even for the smallest transactions. To make the process easier, there are some standard ways in which the shipping and undertaking of responsibilities can be done. In the below article, we shall focus on the cost, insurance and freight along with its benefits to the seller.

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What is CIF (Cost, Insurance and Freight)?

Cost, insurance and freight, commonly known as CIF is an international shipping agreement. It indicates the responsibilities of the seller in an import or export transaction. In simple terms, CIF is an agreement that outlines the extent to which buyers and sellers are held responsible for the cargo while in transit. It is to be noted that cost, insurance, and freight are only applied to goods transported via a waterway, ocean, or sea.

The agreement states the official duties of a seller from when the cargo is packed, loaded, and in transit till the time it reaches its destination. The buyer’s liabilities start once the goods have reached their destination, that is, the point of delivery. Thereafter, the risk of all expenses shifts to the buyer.

CIF is an Incoterm (International Commercial Terms) developed by the International Chamber of Commerce.

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Responsibilities of the Seller in a CIF Agreement

Every commercial transaction involves a set of responsibilities that needs to be fulfilled. A seller’s responsibilities in a CIF agreement are no exception. Some of the responsibilities include.

- Procuring the requisite export licenses

- Ensuring proper packaging

- Mentioning the correct address across all the consignments

- Ensuring safe delivery of goods at the point of dispatch and seamless uploading of the same

- Bearing all the costs involved in the shipping activity

- Bearing all insurance expenses till goods reach the final destination

Benefits of Cost, Insurance and Freight for the Buyer

For smaller businesses (especially buyers), CIF is quite popular as the buyer manages a relatively smaller part of the process, and most of the risk and work is in the hands of the seller. Thus, the seller is charged with making the arrangements for shipping, and insurance of the goods. This leads to an added opportunity for the seller to improve his profit figures. The seller is likely to keep some buffer to make up for the time spent streamlining the things.

Also, the seller has the complete right to retain the transfer of goods till the buyer does not pay for the consignment.

Conclusion

Marine insurance is critical for every business as it helps reduce the financial loss aspect in case of damage or loss of critical cargo. Different types of marine insurance are available based on the need and coverage required. Marine insurance cost or premium thus depends on various factors and is not universal throughout.

Written By: PolicyBazaar - Updated: 17 November 2023

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Policybazaar for Business - Marine Insurance - Customer Reviews
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4.3/5
Based on 114 reviews
4.3
out of 5
Based on 114 reviews
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3.8 April 20, 2023
Anas
Great Experience
I recently purchased Marine insurance from Policybazaar for my shipping business and I must say I am thoroughly impressed with their service and coverage. From start to finish, the experience has been smooth and hassle-free.Thankyou.
Mizoram
4.3 April 03, 2023
Vaishnav
Provides Comprehensive Protection
When it comes to coverage, Marine insurance that i bought from PolicyBazaar has exceeded my expectations. It provides comprehensive protection for my cargo and vessels during transit, ensuring I can focus on my business operations with peace of mind. Thankyou.
Assam
4.3 March 17, 2023
Umang
Excellent Services
I highly recommend Marine insurance from PolicyBazaar website to anyone in the shipping or logistics industry. Their user-friendly website, comprehensive coverage, and excellent customer service make them stand out from the competition. With Policybazaar, I feel confident in navigating the high seas, knowing that my business is well-protected. Thank you, Policybazaar.
Chennai
4.3 February 28, 2023
Vishal
User Friendly Interface
The website's user-friendly interface made it easy to compare different plans and find the perfect fit for my business needs.Thanks
Gurugram
4.3 February 11, 2023
Parth
Prompt Services
I appreciate the transparency and honesty with which Policybazaar handled my claims. They were prompt in processing my claim and their claim settlement process was hassle-free.Thanks PolicyBazaar.
Noida
3.8 February 10, 2023
Rishabh
Exceeds Expectations
I recently had the pleasure of purchsing marine insurance from Policy bazaar website and I must say it has been an outstnding experience from start to finish. I am thrilled to share my positive customer review, as this truly exceeded my expectations. Thanks PB.
Jamshedpur
3.8 January 31, 2023
Arvind
Easy Navigation
The ease of navigating the Policy bazaar website and finding the right marine insurance policy was impressive. The website's user-friendly interface and intuitive design made it incredibly simple to compare various options, understand the coverage details and make an informed decision. I appreciated the transparency provided throughout the process. Thanks.
Ajmer
3.8 January 21, 2023
Vishal
Excellent Support
The customer service provided by Policy bazaar was decent. Their team was responsive, knowledgeable and went above and beyond to assist me at every step. Their professionalism and commitment to customer satisfaction were truly commendable.Thankyou.
Mumbai
4.3 January 11, 2023
Sanjeev Rathor
Efficient Process
When it came to claims processing, Policy bazaar demonstrated remarkable eficiency and effectivenes. I had an unfortunate incident during the coverage period and filing a claim was a breeze. The entire process was streamlined and their team guided me throuugh every necssary step, making it hassle-free. The promptness with which my claim was setled reflected their commitment to their customers' well-being and peace of mind. Thankyou.
Pune
3.8 January 01, 2023
Kunal
Comprehensive Coverage
I must mention the comprehensive coverage provided by the marine insurance policy I purchasd through Policy bazaar. It offered me the necesary protection and peace of mind. Thankyou PolicyBazaar.
Indore