FOB Shipping Insurance
Why should you buy FOB shipping insurance?
The word FOB is an abbreviation for Freight on Board. It can be recognized with the term Free on Board also. Expenses till the boarding of the ship or airplane is borne by the seller. However, the remaining cost is given by the buyer. It is necessary for the buyer to pay a certain amount of sum in order to get the product on destined location. On the occasion, responsibility of delivering the product is not taken by the seller. Therefore, it is always better to have a FOB shipping insurance for complete safety and security.
Obligation of the seller is fulfilled when the product is placed on the rails, trucks, ships or airplanes. From this time onwards, both the responsibility and risk of acquiring resides on the buyer. Inland insurance, port cartage and loading charges and port dues are generally paid by the supplier. However, utilization of these terms has been noticed in case of shipment through sea only. There are certain responsibilities regarding FOB that have to be maintained by both buyers and sellers. Benefits of FOB shipping insurance can be taken in order to reduce the amount of risk related to different aspects of shipment.
Confusion between CIF which is cost, insurance and freight and FOB can be found on several occasions. Therefore, it is necessary to know about both of them for proper use of it. Benefits of FOB can be cleared to some extent in the process. There is no doubt in the fact that both the terms are used for international trade. Goods are generally delivered from a location to another whether it is through inland or air.
For a person who is relatively new in the world of international business must use CIF. In case of a small cargo, it can be considered as a good option also. Sellers are generally responsible here for the transportation of the goods.
Buying FOB shipping insurance is the best option for the seasoned people who are quite familiar with this trade. Relative new person in the business can take some amount of risk in the business through this insurance also. It is not hard for a trader to arrange things for loading as they have their agents for the purpose of forwarding and logistics every time in the hand. In case of FOB trading, products are delivered to the nearest port only.
In FOB trading, buyers are only accountable for the payment of freight services in addition to FOB shipping insurance. However, better deals can be cracked with this insurance in the hand. Sellers are always trying to gain profit from the freight services. Due to this reason, benefits can be achieved by the buyer in this situation. If there is any kind of damage on the way then it can be fulfilled easily through the insurance. By choosing an effective insurance, buyer may able to make profit on every given occasion.
FOB is one of the best ways to make the trade in simple and effective manner. Hassle of trading can be eliminated with the insurance in the hand.