Insurance is the part of the contract most importers accept without reading, usually because it appears as a single line in a CIF quotation. The gap between what buyers assume is covered and what a standard policy actually pays is wide, and on perishable cargo it is widest exactly where the risk lives. This note explains what marine cargo cover does and does not do on an Egyptian mango shipment.
Who arranges the cover, and at what level
Under CIF, the seller is obliged to arrange insurance, but Incoterms 2020 sets the minimum at Institute Cargo Clauses C, which is a restricted named-perils cover. Under CIP the default minimum is Clauses A. Most buyers assume they are getting the wider cover and are not. If you want Clauses A on a CIF shipment, it must be written into the contract, and the small additional premium is worth paying.
The standard insured value is 110 percent of the CIF value. The additional 10 percent is intended to cover the buyer’s anticipated profit and incidental costs. Buyers with high inland costs at destination sometimes negotiate a higher percentage. Under FOB or CFR the buyer arranges their own cover, and should ensure it attaches from the moment risk passes, which is when the goods are loaded at the origin port. Our guide to buying Egyptian mango on FOB or CFR terms covers where risk transfers on each.
The exclusion that matters most on fruit
Every standard marine policy excludes loss caused by inherent vice, ordinary leakage, and ordinary loss in weight or volume. On fresh produce this means natural deterioration in transit is not an insured loss. Fruit that ripens further than expected, softens, or develops a fungal infection from an infection point that already existed at loading is not covered by a marine policy, whatever the arrival condition report says.
This surprises buyers, and it is the single most common reason a produce claim is declined. Marine cover is designed for accidental external causes, not for the natural behaviour of the goods. Deterioration of that kind is a commercial matter between buyer and seller, resolved through the quality claim process rather than through the insurer.
Reefer machinery breakdown cover
This is the extension that actually protects perishable cargo, and it is not automatic. Refrigerated machinery breakdown cover pays for loss caused by failure of the container’s refrigeration unit, usually subject to a minimum continuous breakdown period, commonly 24 hours. Some policies extend to a shorter period at a higher premium.
Buyers shipping mango should confirm three things at placement. That machinery breakdown cover is included and not excluded. What the minimum breakdown period is. And whether the cover responds to a failure at the terminal as well as on board, since plug-out time at a congested port is a real exposure. Without this extension, a reefer failure that spoils a full container may leave you with only a claim against the carrier, which is limited by the bill of lading.
What a claim needs
Notify the insurer or their nominated survey agent immediately on discovering damage, before the cargo is moved or sold. Appoint a surveyor through the agent named on the certificate, not one of your own choosing, since an unappointed survey may not be accepted. Preserve the damaged goods until the survey is done.
The file needs the insurance certificate, the commercial invoice and packing list, the bill of lading, the survey report, the temperature logger download, dated photographs identifying pallets, and evidence of the claim lodged against the carrier. That last point is often missed. Insurers require the assured to protect rights of recovery against third parties, which means giving the shipping line written notice of loss within the period stated in the bill of lading.
Where insurance ends and the supply relationship begins
Insurance covers accidental external events. Specification conformity at loading is the supplier’s responsibility, and post-arrival handling is the buyer’s. The three do not overlap, and a well-run shipment separates them with evidence: pre-shipment inspection at origin, a logger in the load, and an arrival record on the day the doors open. Our note on arrival condition and claims on Egyptian mango covers the commercial side of that.
To discuss insurance terms on a CIF offer, request Clauses A cover with machinery breakdown extension, or review the documentation on a current booking, contact the Nile Prime export desk on WhatsApp at +20 10 9911 1918.