Incoterms 2020
The International Chamber of Commerce rules that allocate costs, risks and the duty to insure goods between seller and buyer in an international sale.
Incoterms are eleven contractual rules, designated by three letters, that parties to an international sale incorporate into their contract to specify who arranges transport, who pays what, and when the risk of loss or damage passes from seller to buyer. They say nothing about transfer of ownership or price, but they determine who has an insurable interest at each stage of the journey. Only two rules require the seller to insure the goods for the buyer's benefit: CIF, for sea transport, and CIP, for all modes. The 2020 version set different levels: CIF requires at least Institute Cargo Clauses C cover, with named perils, while CIP now requires all risks cover of the A type, for 110% of the value. For the cargo underwriter, the Incoterm is therefore the first question: it says who the insured is, from where and to where.
Applicable from January 1, 2020, Incoterms 2020 raised the seller's insurance duty under CIP to Institute Cargo Clauses A, left CIF at level C, and replaced the DAT rule with DPU, delivered at place unloaded.
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