Import protection

[Kishan Barai]

Suppose I am an Importer & I have done deal in LC at sight & incoterm is CIF. Now as per LC the Supplier (Exporter) will receive money against documents. As an Importer I will receive goods later. Now I found that the goods are received in damaged condition. Exporter has got clean B/L so he is saved. Now who will pay me if I have got cover C as per CIF ?? In cover C damages of goods in not cover I suppose. Is cover A required ??

[Kishan Barai]

Please also suggest the best possible way to protect Import in most secured way. Thanks

[Raghunandhaanan rvi]

Sir,

Since the term is CIF, supplier would have taken insurance coverage against damage etc.

it is better to see the insurance coverage as to whether the insurance is covered for warehouse to warehouse. If so,

you are safe and supplier may able to reimburse the cost

Please correct me if i am wrong

tnx

[Kishan Barai]

Best would be insurance cover A as it would cover all risk. But insurance co provide insurance without looking at cargo. Insurance company do spot survey when claim is asked for, When you receive cargo in damaged condition & if the cargo is poorly Packed you might not get any money for insurance.

Even if the mode of payment is LC & incoterm is CIF. Exporter will get money against documents & Importer will receive damage cargo in above case.

I hope you are getting my point. Please reply..

Thanks Sir.

[Raghunandhaanan rvi]

Yes Sir. Your points also noted.

In such cases, it would be better to mention in LC all the conditions like export worthy packing / palletization/ lashing etc that the exporter is suppose to taken care of in order to protect your interest. So I hope there may not be any issue at later date

Thanks

[Kishan Barai]

Respected Sir, In LC bank only deals with documents not with the goods. What ever the conditions of goods / palate / cargo is not ment to be checked by banking authority. They only need to check documents, that the legal point of view.

I hope you are getting my point. Please reply sir.

AI Summary

CIF insurance responsibility: importers should require All Risks cover and LC packing conditions to protect against damaged goods. Under CIF with payment by sight letter of credit, the exporter is paid on presentation of complying documents (including a clean bill of lading) while the importer receives the goods and faces risk of damage unless insurance is adequate. All Risks (Cover A) and warehouse-to-warehouse wording offer the broadest protection; lesser covers may exclude perils or packing-related losses. Banks deal only with documents and do not inspect goods, so importers should require specific LC clauses on insurance scope and export-worthy packing to preserve claimability.