FOB and Insurance
While insurance coverage isn’t mandatory under the FOB Incoterm, it’s a common practice for either the buyer, the seller, or both parties to secure insurance. The insurance can cover the entire journey or the respective responsibilities of each party.
FOB for Containerized Cargo
Although FOB is commonly used for containerized imports, it’s technically an incorrect choice for such shipments. The risk only transfers from the seller to the buyer when the goods are loaded onto the vessel, which may occur days after the container is dropped off at the terminal. This grey area can lead to disputes over when and where damage to the goods occurred.
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