In re-export trade business, there is confusion about who should purchase insurance, whether it’s the seller, buyer, or intermediary. The best answer indicates that the party responsible for purchasing insurance usually depends on the trade contract. If not specified, it is determined by the principle of "risk transfer." Under terms like FCA, the buyer purchases insurance, while under terms like CIF, the seller purchases insurance. It is also advisable to choose insurance types based on one’s own interests to protect rights and interests.
How to Purchase Re-export Trade Insurance Appropriately?
Resolved
Our company plans to engage in re-export trade business recently. I heard that purchasing insurance can reduce risks, but I haven't been exposed to this area before and am not sure how to buy re-export trade insurance. What factors should we consider in our situation? Are there any specific insurance terms to pay attention to? Which insurance company is better to choose? I hope experienced people can give some detailed advice, thank you!
Trade Expert Insights Answers
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
When purchasing re-export trade insurance, you should first clarify the scope of coverage. It should cover the risks that the goods may face in various links such as transportation and warehousing, such as damage or loss during transportation, and fire or theft during warehousing.
Secondly, choose appropriate insurance terms. Common ones include "All Risks" insurance, "Particular Average" insurance, and "Basic" insurance. "Basic" insurance has a relatively narrow scope of coverage, while "All Risks" insurance has the broadest coverage but a higher premium. You should choose based on the characteristics of the goods and your risk tolerance.
Thirdly, pay attention to the reputation and service of the insurance company. For example, Zhongmaoda has efficient claims service and a good reputation.
Regarding premiums, different insurance companies have different calculation methods, so you should compare them. You should also pay attention to the insurance period, which needs to match the re-export trade process to avoid any period of no coverage. In summary, by comprehensively considering these factors, you can purchase suitable re-export trade insurance.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
When buying re-export trade insurance, you need to be clear about the characteristics of the goods. For fragile items, you need to pay more attention to protection against collision during transportation. When selecting insurance terms, focus on the strength of protection for such risks. At the same time, consult several insurance companies and compare the terms and premium prices.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
When buying re-export trade insurance, first determine the trade route. If the route passes through areas with unstable situations, you need to focus on coverage for special risks such as war and strikes, and clearly specify this part in the terms to see if the insurance company's coverage includes it.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
You can find professional insurance brokers. They are familiar with the products of various insurance companies and can quickly screen suitable insurance plans based on your actual re-export trade situation, saving you time and effort, and possibly obtaining preferential premiums.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
Pay attention to the start and end times of insurance liability. Generally, it is a "warehouse to warehouse" clause, but some may have special provisions, which should be carefully studied to prevent the goods from being uninsured at a certain stage.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Consider fluctuations in the value of goods. If the re-export trade cycle is long, the value of goods may change significantly. When purchasing insurance, you should discuss with the insurance company how to deal with this situation, such as agreeing on a value adjustment mechanism.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
Understand the insurance company's claims process. A simple and fast claims process can lead to faster compensation and reduced losses when goods are lost. You can inquire with other companies with experience in re-export trade insurance.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
Analyze the risks in past similar re-export trade cases. If a certain risk often occurs in similar past business, you should strengthen the coverage for that risk when purchasing insurance.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
Pay attention to the exclusion clauses in the insurance contract. Clearly understand which situations the insurance company will not compensate for in advance to avoid future claims disputes.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
Check the financial status of the insurance company. Companies with good financial status have better guarantees for claims and do not have to worry about inability to compensate.