Buyer or Seller? Who pays Insurance under DAP Inco terms?

Importer or Exporter?  Who is responsible to pay Insurance under DAP terms of delivery under International Trade? 

While delivering goods at the named location under DAP terms,  a question arises  about the party liable for arranging  insurance on movement of goods.  Either buyer or Seller?    Under the incoterms 2020 – DAP, the exporter takes care of risks and cost to move the goods to deliver at named location of buyer at his country by packing of goods, pre carriage, export documentation, export customs clearance,  main carriage and on carriage except the liability of customs clearance and import taxes at importing country.

When coming back to the question on – Who undertakes the risk of arranging insurance under DAP? 

According to DAP terms under Incoterms 2020 published by ICC,  neither the exporter nor the importer is responsible to undertake insurance.  So,  under DAP terms, the insurance on movement of goods is arranged by the exporter or importer as per their mutually  agreed terms and conditions on contract of carriage incorporated under their Sale contract.

In short, under DAP terms of delivery under Incoterms 2020, neither the party is responsible to arrange insurance.  The  importers and exporters may also note, if  the letter ‘ I ‘  is not there under three letter inco terms, the rules are silent about parties responsible for insurance.  For example among the Incoterms 2020, except CIP and CIF all other delivery terms are silent about Insurance.

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Click here to read latest Inco terms rules for delivery of goods  

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