Import and Export TradeFacing multiple risks including cross-border transportation, policy changes, and currency fluctuations, a single cargo loss or buyer default could wipe out months of profits. Appropriate insurance not only transfers risks but also enhances client trust. This article systematically analyzesFive Core Insurance Typesto help you build a comprehensive risk protection network.

Cargo Transportation Insurance: Protecting the Entire Logistics Process

Marine/Air All Risks

• Coverage Scope: Covers cargo losses due to natural disasters (typhoons, tsunamis, etc.), accidents (shipwrecks, fires, etc.), and handling damages during transportation. It offers the broadest coverage.
• Exclusion Clauses: Typically excludes war and strike risks, which require additional coverage; does not cover inherent defects (e.g., perishable goods spoilage).
• Applicable scenes: High-value goods (precision instruments, luxury items, etc.), fragile items (glass products, etc.).

Free from Particular Average (FPA)

• Coverage Scope: Only covers total loss or general average caused by major accidents like vehicle overturning or sinking., does not cover partial losses.: Premiums are 30%-50% lower than All Risks, suitable for low-value bulk cargo (ores, timber, etc.).
• Cost Advantage: Covers cargo losses due to war, piracy, strikes, etc. Essential for high-risk routes like the Red Sea and Black Sea.

War and Strike Risks

• Coverage ScopeKey Points for Insurance Application
• Key points of insuranceConfirm in advance whether the shipping route falls within the insured coverage area, as some insurers exclude regions affected by the Russia-Ukraine conflict.

Export Credit Insurance: Mitigating Payment Risks

Short-Term Export Credit Insurance (Sinosure)

• Coverage ScopeBuyer bankruptcy, payment default (credit terms ≤180 days), political risks (foreign exchange controls, war, etc.).
• Compensation ratioMaximum compensation covers 90% of the loss amount, reducing bad debt pressure on enterprises.
• Applicable scenesOpen account (O/A) transactions, clients from emerging markets (Africa, Latin America, etc.).

Medium-to-Long-Term Export Credit Insurance

• Coverage ScopeFor large-scale projects (e.g., power plants, ship exports), covers buyer default, sovereign debt crises, etc.
• Typical casesCase: A company exporting photovoltaic power plant equipment to Southeast Asia received $5 million in compensation due to the buyer countrys foreign exchange controls preventing payment.

Product Liability Insurance: Avoiding Legal Risks

• Coverage ScopeLegal liability for third-party bodily injury or property damage caused by product quality defects.
• Key dataAverage product liability lawsuit compensation in the U.S. exceeds $500,000; CE certification is mandatory for EU products.
• Insurance recommendationsFor exports to high-litigation-risk regions like Europe and America, recommended coverage ≥$1 million.

Political Risk Insurance: Coping with Black Swan Events

• Coverage Scope:
• Government expropriation, nationalization;
• Asset losses due to war or riots;
• Foreign exchange restrictions.
• Applicable scenesInvesting in factories in politically unstable countries (e.g., Middle East, Africa) or undertaking government projects.
• Case studyCase: A company setting up a factory in Vietnam received $3 million in compensation for expropriation due to sudden policy changes.

Other Supplementary Insurance Types

Warehouse Insurance

• Covers fire and theft losses during warehouse storage, especially suitable for transit warehouse stock.

Exchange Rate Fluctuation Insurance

• Hedges against foreign exchange fluctuation risks by locking in future exchange rates (e.g., locking in the exchange rate for settlement 6 months after contract signing).

Supply Chain Disruption Insurance

• Covers losses from supply chain disruptions due to natural disasters, pandemics, etc. (e.g., raw material shortages, factory shutdowns).

Practical Guide to Insurance Application

1. Accurate risk assessment:

• High-value goods and long-distance shipments should prioritize all-risk coverage;
• High-risk countries (e.g., Argentina, Pakistan) must purchase credit insurance + political risk insurance.

1. Select reputable institutions:

• International giants: Allianz, AIG;
• Domestic leaders: Sinosure, Ping An Property & Casualty.

1. Avoid common pitfalls:

• UnderinsuranceInsure at 110% of the CIF value of goods to cover expected profits;
• Underreported high-risk factors: Concealing the flammable/explosive nature of goods may lead to claim rejection.

Conclusion

Risk management in import/export trade is never one-size-fits-all - it requires customized insurance portfolios based on cargo characteristics, shipping routes, buyer creditworthiness, and other factors.Customized insurance portfolio. We recommend enterprises establish a risk map incorporating transport insurance, credit insurance, liability insurance into cost accounting, while engaging professional insurance brokers for solutions. Remember:Insurance premiums are costs, but more importantly investments—they enable enterprises to navigate storms steadily and truly achieve global trade without insurance troubles!