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The buyer may wish to arrange insurance cover for the main carriage, starting from the point where the goods are taken in charge by the carrier — NB this will not be the place referred to in the Incoterms rule, but will be specified elsewhere within the commercial agreement.

Search Incoterms Explained:. Things to watch for. The seller assumes all risks, including loss, until the goods are in the care of the nominated party.

The carrier could be the person or entity responsible for the carriage by sea transport, rail, road, etc. Also, the seller pays the freight charges to transport the goods to the specified destination.

The risk of damage or loss to the goods is transferred from the seller to the buyer as soon as the goods have been delivered to the carrier.

The seller is responsible only for arranging freight to the destination and not for insuring the shipment of the goods during transport. The term CPT is typically used in conjunction with a destination.

The responsibility for freight costs also includes export fees or taxes required by the country of origin. However, the risk is transferred from the seller to the buyer as soon as the goods are delivered to the first carrier, even if multiple means of transportation land, then air, for example are employed.

So, if a truck carrying a shipment to the airport encounters an accident in which the goods are damaged, the seller is not responsible for damages if the buyer has not insured the products because the goods had already been transferred to the first carrier.

The seller only pays freight charges for delivery to this interim place. This situation may arise if the buyer can arrange for freight to the eventual destination at a significantly cheaper rate than the seller or if the goods are in such demand that the seller can dictate terms.

Corporate Insurance. The seller must comply with any transport-related security requirements for the whole of the transport to the destination.

The buyer has no obligation to the seller to arrange a contract of carriage. The seller does not have the risk beyond the delivery point so it has no obligation to the buyer to arrange a contract of insurance.

However, if the buyer requests, at its risk and cost, the seller must provide the buyer with information in its possession that the buyer needs to arrange its insurance.

If there is any information which the buyer requests that is not already known to the seller, logically the seller can, and probably would, choose to assist.

If the goods are lost or damaged in transit, and the buyer therefore refuses to pay for them, in essence breaching the contract, the seller will want to have a fall-back of being able to claim on its own marine insurance.

Despite having the risk of loss or damage to the goods from the delivery point, the buyer does not have an obligation to the seller to insure the goods.

Whether the buyer chooses to insure the goods or bear the risk themselves is entirely their choice. If the modes include carriage by sea such as in FCL or LCL transactions then it is usual for the seller to obtain a sea waybill or bill of lading.

Shipment by truck might involve issue of a CMR in Europe or simply some form of consignment note or truck waybill and these too are not negotiable.

Shipment by rail similarly will usually be covered by some form of rail consignment note that is not negotiable. The transport document must cover movement of the contracted goods within the agreed period for shipment.

If it is agreed then this document must enable the buyer to claim the goods from the carrier at the named place of destination, and in a string sale enable the buyer to sell the goods in transit to a subsequent buyer by transferring that document.

This would usually be in the form of a negotiable bill of lading. The buyer must accept the transport document provided by the seller so long as it is in conformity with the contract.

This rule, like all the multimodal rules, is suitable for both domestic and international transactions. Where applicable, the seller must at its own risk and expense carry out all export clearance formalities required by the country of export, such as licences or permits; security clearance for export; pre-shipment inspection; and any other authorisations or approvals.

Where applicable, the buyer must carry out and pay for all formalities required by any country of transit and the country of import.

These include licences and permits required for transit; import licences and permits required for import; import clearance; security clearance for transit and import; pre-shipment inspection; and any other official authorisations and approvals.

At first glance it might seem strange that both seller and buyer have responsibility for pre-shipment inspections. The seller must also package the goods, at its own cost, unless it is usual for the trade of the goods that they are sold unpackaged, such as in the case of bulk goods.

In all rules there is no obligation from the buyer to the seller as regards packaging and marking. There can in practice however be agreed exceptions, such as when the buyer provides the seller with labels, logos, or similar.

The seller must pay all costs until the goods have been delivered under A2, other than any costs the buyer must pay as stated in B9.

Transport costs resulting from the contract of carriage, including costs of loading the goods and any transport-related security, must be paid by the seller.

The cost of providing to the buyer proof of the goods being delivered are also for the seller. If the contract of carriage includes unloading at the agreed destination, which would typically be the case in most shipments, the seller must pay these.

Additionally, any costs of transit included in the contract of carriage must also be paid by the seller.

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