Insurance for international rail transport
How to assess the risks and get the right insurance cover you need before transporting your goods by rail.
As with any commercial transaction, there are risks associated with trading internationally. You should make sure you arrange the insurance cover you need before moving your goods by rail or any other mode of transport.
In order for insurance cover to be valid, you must show that you have an insurable interest in the insured goods. This means showing that the goods are yours and that you bear the risks associated with them.
Three main risks arise in international trade. These are loss, damage and delay, including detention at customs. The contracts you draw up should use Incoterms to specify exactly how these risks are shared between buyer and seller.
Incoterms are an internationally recognised set of trading terms that spell out exactly when responsibility for the costs and risks of a transaction shift from seller to buyer. This will affect your insurance needs because the greater the costs you're responsible for, the greater the insurance cover you'll need to arrange. Incoterms 2020 cover freight security obligations and new types of container transport. For more information, see our guide to international commercial contracts - Incoterms.
Traders frequently under-insure themselves, so it is recommended that you add ten per cent to the amount of cover you think you need. You can also arrange cover for contingencies such as the buyer refusing to accept your goods when they arrive. For more information about arranging insurance for your international trade, see transport insurance.