The three base answers on international cargo insurance live in three different sources that traders routinely blend: the insurance contract under Vietnam’s Insurance Business Law 08/2022, the international market’s cargo insurance conditions, and Incoterms 2020 — which is trade usage of the International Chamber of Commerce, not a Vietnamese legal document. Separating these three sources correctly is the precondition for knowing who to claim against, and within what time, when goods vanish mid-journey.
When insurance must be bought, and which conditions suffice
Vietnamese law does not compel every international consignment to be insured; the duty to insure arises from the trade term the parties chose and from bank requirements in documentary credit settlement. The only two Incoterms placing an insurance duty on the seller are CIF and CIP: under Incoterms 2020, for CIF the seller must buy only the minimum level under the ICC(C) conditions — a limited listed-perils cover — while for CIP the seller must buy at the ICC(A) level, the all-risks conditions. This is an important change of the Incoterms 2020 edition and the point buyers most often miss when assuming CIF goods are fully insured.
Under the other terms (FOB, CFR, EXW, DAP, DDP and the rest), buying insurance belongs to the party bearing the transit risk and is a commercial arrangement: whichever side wants protection insures itself under a goods transport insurance contract within the framework of the Insurance Business Law 08/2022/QH15, at ICC(A), (B) or (C) level per risk appetite and cargo value. High-value, fragile goods or long multi-leg routes are usually advised to buy ICC(A); low-value raw materials on short routes may accept a lower level — but that should be a business decision made with full information, not a default assumption that ‘the other side surely bought it’.
Goods lost mid-journey: who is claimed against, with what file
The first party to claim against is the insurer that issued the policy for the consignment — if the consignment is insured. Immediately on discovering loss or damage, the receiver must draw up a delivery record noting the loss expressly (never sign a clean receipt), notify the loss to the insurer or its survey agent within the period the policy terms require, and preserve the goods’ condition for survey. A standard claim file comprises the insurance policy or certificate, the bill of lading, the commercial invoice, the packing list, the delivery record noting loss and the loss survey report of an independent surveyor.
After compensating the insured, the insurer is subrogated to pursue the carrier or the third party that caused the loss up to the amount paid — the subrogation mechanism of the Insurance Business Law. This means the two claim routes ‘shipper to carrier’ and ‘shipper to insurer’ do not exclude each other: an insured shipper takes the insurance route first for speed, and the insurer takes over pursuing the carrier; an uninsured shipper must claim against the carrier itself under the carriage contract and bill of lading, within the carrier’s maritime liability limits — a far weaker position, and the most expensive lesson of an uninsured consignment.
Under which Incoterms the seller still bears risk, and the claim deadlines
The D group of Incoterms 2020 — DAP, DPU and DDP — is the only group where the seller bears transit risk until the goods reach the agreed destination and are ready for unloading to the buyer. Conversely, in the C group (CFR, CIF, CPT, CIP), risk has already passed to the buyer at the departure delivery point, even though the seller pays the freight and (for CIF, CIP) the insurance premium: a CIF buyer whose goods are lost at sea must itself claim on the insurance the seller bought for it — exactly as the term is designed. Misreading this point is the origin of most ‘thought the seller was still responsible’ disputes.
On deadlines, two layers must be separated: the deadline to notify loss to the insurer is a contractual one, usually requiring notice immediately on discovering the loss, and delay weakens the claim position; whereas the limitation period for suing on an insurance contract dispute under Article 30 of the Insurance Business Law 08/2022/QH15 is 03 years from the date the dispute arises. In parallel, claims against the sea carrier bear shorter periods under maritime law and bill of lading terms. The safe practice is to work every claim within the first weeks after discovering the loss, rather than waiting near any limitation date.
Frequently asked questions
Under what terms should export cargo insurance be bought?
The law does not compel every international consignment to be insured; the duty follows the Incoterm and bank requirements: only CIF and CIP place an insurance duty on the seller — CIF at the minimum ICC(C) level, CIP at ICC(A) under Incoterms 2020. Under other terms the risk-bearing party insures itself if it wants protection, within the goods insurance contract framework of the Insurance Business Law 08/2022/QH15.
Whom to claim against if goods are lost in transit?
Claim first against the insurer that issued the policy (where insured): draw up a delivery record noting the loss, never sign clean, notify the insurer immediately, preserve the goods for survey and file the policy, bill of lading, invoice, loss record and independent survey report. After paying, the insurer is subrogated to pursue the carrier. Uninsured, the shipper claims against the carrier itself under the bill of lading within maritime liability limits — a far weaker position.
Under which Incoterms does the seller bear the risk?
The D group (DAP, DPU, DDP) of Incoterms 2020: the seller bears risk to the agreed destination. In the C group (CFR, CIF, CPT, CIP) risk already passed to the buyer at the departure delivery point although the seller pays freight and premiums — a CIF buyer whose goods are lost must claim on the seller-bought insurance itself.
What is the time limit for an insurance claim?
Loss notice to the insurer must meet the policy’s required period, usually immediately on discovery — delay weakens the claim. The limitation period for insurance contract disputes is 03 years from the date the dispute arises under Article 30 of the Insurance Business Law 08/2022/QH15; claims against the sea carrier bear shorter maritime and bill-of-lading periods.
This article has been quality-reviewed by the FLAW AI Legal Council