Insurance Gaps and Cargo Insurance Design under Ex-Go-Down Terms
Interlink編集部Insurance Gaps and Cargo Insurance Design under Ex-Go-Down Terms
Ex-Go-Down is a non-standard trade expression that may be used in contracts, quotations, purchase orders, or commercial negotiations to indicate delivery of goods at a manufacturer’s, supplier’s, trader’s, or other designated warehouse.
Ex-Go-Down is not an official rule under Incoterms® 2020 issued by the International Chamber of Commerce. The contract must therefore specify the place and condition of delivery, who loads the goods onto the collecting vehicle, when the risk transfers to the buyer, and who arranges export clearance and inland transportation to the port.
EXW is an official Incoterms® rule under which the seller delivers by placing the goods at the buyer’s disposal at the named place. Although both expressions may involve delivery at a warehouse, Ex-Go-Down and EXW must not be treated as synonyms.
The principal risk under Ex-Go-Down terms arises when the contractual point of risk transfer does not correspond with the attachment of insurance. This mismatch may create an uninsured gap between the seller’s warehouse and the port, CFS, CY, or loading on board the vessel.
The sales term, physical delivery, transport arrangement, attachment of cargo insurance, and the liability of a carrier or freight forwarder are separate matters. The party responsible for a loss cannot be determined solely because the goods were delivered at a warehouse, the transaction was described as FOB, or a freight forwarder arranged the transport.
Scope of This Article
| Item | Covered in This Article | Covered in Other Articles |
|---|---|---|
| Ex-Go-Down Terms | The meaning of a non-standard warehouse-delivery expression and the contractual matters requiring clarification | Governing law, jurisdiction, and legal interpretation of individual contract wording |
| Difference from EXW | The distinction between the official EXW rule and a non-standard expression | Detailed EXW obligations concerning loading, export clearance, and local law |
| Difference from FOB | The gap between warehouse delivery and risk transfer on board the vessel | FOB costs, vessel arrangements, and the use of FCA for containerised cargo |
| Insurance Gaps | How uninsured periods may arise between the seller’s warehouse and loading on board | Product-specific policy terms, exclusions, and underwriting requirements |
| Export FOB Insurance | Its basic role in protecting the seller’s pre-shipment interest | Product-specific coverage, premiums, exclusions, and special clauses |
| CIF and CIP | Comparison of arrangements under which the seller procures insurance | Detailed insured values, Institute Cargo Clauses, insurance documents, and L/C requirements |
| Inland and Port Stages | Loading, inland trucking, CFS or CY storage, and pre-loading accidents | Initial response to export cargo pickup and terminal-delivery claims |
| Insufficient Packing | Distinguishing transport accidents, insufficient packing, and inadequate product strength | Export packing standards, inherent vice, and detailed packing exclusions |
| Accident Response | The order for confirming the accident location, insurance attachment, contracting party, operator, and evidence | Detailed insurance claims, carrier recovery, and litigation procedures |
Four Separate Layers to Confirm
The expression “warehouse delivery” is not sufficient to determine risk allocation or insurance. At least four separate layers must be reviewed.
| Layer | Matters to Confirm | Main Documents | Risk if Confused |
|---|---|---|---|
| Contractual Delivery | The place and condition in which the seller completes its delivery obligation | Sales contract, purchase order, quotation, and trade terms | The seller and buyer assume different delivery points. |
| Transfer of Risk | The point at which the economic risk of loss or damage transfers to the buyer | Sales contract, applicable Incoterms® rule, and special terms | The party bearing the loss cannot be identified after an accident. |
| Transport and Handling Arrangement | Who arranges the vehicle, loading, inland transport, export clearance, and port delivery | Booking, pickup instruction, work order, and correspondence | The operator is incorrectly treated as the contracting party responsible for the entire loss. |
| Insured Transit | Where insurance attaches, terminates, and which risks are covered | Policy, insurance application, declaration, and special clauses | The party bearing the risk has no insurance and cannot rely on another party’s policy. |
Transfer of risk and attachment of insurance do not automatically occur at the same point. Even where the buyer assumes the risk at the seller’s warehouse, an uninsured gap may arise if the buyer’s policy attaches only after loading on board the vessel.
Conversely, where the seller bears the risk until loading on board under FOB but has not arranged export FOB insurance or equivalent protection, the pre-shipment stage may remain uninsured.
Comparison with Official Incoterms® Rules
| Term | Status | Basic Point of Risk Transfer | Main Transport Arrangement | Insurance Consideration |
|---|---|---|---|---|
| Ex-Go-Down | Non-standard contractual or commercial expression | Determined by the specific contract wording | Depends on the contract and actual arrangement | Confirm loading, inland transport, port delivery, and the attachment of insurance individually. |
| EXW | Official Incoterms® 2020 rule | When the goods are placed at the buyer’s disposal at the named place | The buyer generally bears a broad range of transport obligations | The buyer’s insurance should attach at the named place, including the treatment of vehicle loading. |
| FCA | Official Incoterms® 2020 rule | When the goods are delivered to the buyer’s nominated carrier or other person at the agreed place | The seller delivers at the named place and completes export clearance | For containerised cargo, FCA may correspond more closely with the actual delivery point than FOB. |
| FOB | Official rule for sea and inland waterway transport | When the goods are placed on board the vessel at the named port of shipment | The seller handles delivery on board, and the buyer arranges the main carriage | Consider export FOB insurance for the seller’s warehouse-to-vessel stage. |
| CFR | Official rule for sea and inland waterway transport | When the goods are placed on board the vessel at the named port of shipment | The seller arranges carriage to the destination port | The seller has no Incoterms® obligation to procure insurance for the buyer, so the insurance arranger must be identified separately. |
| CIF | Official rule for sea and inland waterway transport | When the goods are placed on board the vessel at the named port of shipment | The seller arranges carriage and insurance to the destination port | Risk transfers at origin. Under Incoterms® 2020, the default insurance requirement is based on minimum cover. |
| CIP | Official rule for any mode or combination of modes | When the seller delivers the goods to its contracted carrier at the agreed place and point | The seller arranges carriage and insurance to the named destination | Incoterms® 2020 generally requires broader insurance than CIF, but the actual policy and endorsements must be checked. |
Incoterms® rules allocate obligations, costs, and risks between the seller and buyer. They are not insurance clauses that determine the actual cover, exclusions, duration of insurance, or right to claim under a cargo policy.
Even where the seller must procure insurance under CIF or CIP, a particular accident is not automatically covered. The cargo, route, insured conditions, exclusions, earthquake risk, storage period, and declared information must be reviewed.
Insurance Stages from the Seller’s Warehouse to Loading on Board
| Stage | Typical Accidents | Potential Insurance | Typical Cause of an Insurance Gap | Matters to Confirm |
|---|---|---|---|---|
| Inside the Seller’s Warehouse | Storage damage, fire, theft, leakage, and earthquake | Property insurance, stock insurance, movable-property insurance, or cargo insurance | The parties incorrectly assume that export-designated cargo is outside all existing insurance | Confirm the insured property, storage location, pre-shipment status, and earthquake cover. |
| Loading onto the Collecting Vehicle | Forklift impact, dropping, overturning, and lifting accidents | Export FOB insurance, buyer’s cargo insurance, or operator’s liability insurance | The contract does not identify whether risk transfers before or after loading | Confirm the loading operator, supervisor, delivery condition, and attachment of insurance. |
| Inland Trucking | Collision, overturning, shifting, wet damage, theft, and earthquake | Export FOB insurance, marine cargo insurance, or inland transit insurance | The buyer’s policy attaches only on board while the seller has no pre-shipment insurance | Confirm the place of dispatch, attachment of cover, inland route, and vehicle type. |
| Before Terminal or Warehouse Receipt | Waiting accidents, rain damage, misdelivery, and theft | Cargo insurance, inland transit insurance, or carrier liability insurance | Waiting before receipt is incorrectly treated as storage outside the transit | Confirm continuity of transit, reason for waiting, custodian, and receipt time. |
| After CFS In-Gate | Storage damage, vanning damage, and contact with other cargo | Cargo insurance, export FOB insurance, or CFS operator liability insurance | The parties assume that the buyer’s insurance automatically attaches at CFS receipt | Confirm the CFS receipt, insured transit, storage period, and operator. |
| After CY In-Gate | Container damage, terminal collision, overturning, flooding, and earthquake | Cargo insurance, export FOB insurance, or terminal liability insurance | CY in-gate is treated as equivalent to loading on board | Confirm gate-in time, loading date, rollover, and storage coverage. |
| During Loading on Board | Dropping during lifting, container impact, and cargo-handling accidents | Export FOB insurance, marine cargo insurance, or stevedore liability insurance | The termination of the seller’s policy and attachment of the buyer’s policy are unclear | Confirm the insurance termination, buyer’s attachment of cover, and actual loading time. |
| After Loading on Board | Heavy weather, general average, fire, seawater damage, and containers lost overboard | Marine cargo insurance | The buyer failed to arrange cover or applied only after the voyage began | Confirm placement of cover, policy, shipment date, route, and insured conditions. |
Main Insurance Designs
| Design | Main Arranging Party | Expected Attachment Point | Suitable Situation | Main Considerations |
|---|---|---|---|---|
| Buyer’s Insurance from the Seller’s Warehouse | Buyer | Named seller’s warehouse or pickup point | Where risk transfers under Ex-Go-Down or an EXW-type arrangement | Confirm loading, export-country inland transit, export clearance, and port storage. |
| Seller’s Export FOB Insurance | Seller | Seller’s warehouse through loading on board | Where the seller bears risk until loading under FOB or CFR | Confirm storage, packing work, port stages, and termination of insurance. |
| Seller-Arranged CIF Insurance | Seller | Place of dispatch stated in the policy | Where the seller arranges ocean carriage and insurance | Risk transfer and insured transit are different concepts. Confirm the insurance level and inland stage. |
| Seller-Arranged CIP Insurance | Seller | Place of dispatch stated in the policy | Container, air, truck, or multimodal transport | Confirm the named destination, carrier-delivery point, termination, and storage conditions. |
| Continuous Seller and Buyer Insurance | Seller and buyer | Contractually agreed changeover point | Where each party arranges insurance in its own country | Focus on gaps caused by mismatched attachment and termination points rather than only duplicate cover. |
| Shipment-Specific Special Cover | Party bearing the risk | Actual dispatch, storage, or operational start point | Heavy machinery, exhibitions, precision equipment, prolonged storage, or special handling | Review underwriting conditions, exclusions, survey requirements, and operational warranties. |
Role of Export FOB Insurance
In Japanese insurance practice, export FOB insurance may be used for the stage from the seller’s dispatch point to loading on board the export vessel where the seller bears the pre-shipment risk under an FOB or CFR transaction.
The relevant stage may include inland transportation from the seller’s warehouse, temporary storage at a port warehouse, CFS or CY, and cargo handling before loading. The actual attachment, termination, storage period, and covered operations depend on the policy, product, and special clauses.
If the Ex-Go-Down contract transfers risk to the buyer at the seller’s warehouse, the seller is not automatically the party that should arrange export FOB insurance. The primary design may instead be for the buyer’s insurance to attach at the warehouse pickup point.
However, even where the transaction is labelled Ex-Go-Down, the seller may in practice undertake port delivery, loading on board, or liability for loss during the intervening stage. Insurance must then reflect the actual contractual allocation rather than the label alone.
The need for insurance must be assessed from the allocation of risk, operational arrangements, insurable interest, and contractual loss exposure.
CIF or CIP Does Not Automatically Eliminate Every Gap
CIF and CIP require the seller to procure a specified level of insurance for the buyer. These rules may make it easier for the seller to control the insurance arrangement.
However, changing the sales term to CIF or CIP does not eliminate a gap if the policy attaches after the goods leave the seller’s warehouse.
Under CIF, risk transfers when the goods are placed on board at the port of shipment, while the seller arranges carriage and insurance to the destination port. Under CIP, risk transfers when the goods are delivered to the seller’s contracted carrier, while the seller arranges carriage and insurance to the named destination.
Costs, transfer of risk, and insured transit may therefore involve different points. The policy’s place of dispatch, destination, route, insured conditions, and storage provisions must be confirmed.
Incoterms® 2020 requires different default insurance levels under CIF and CIP. The cargo’s actual exposure must be assessed rather than assuming that the trade-term label provides sufficient cover.
Warehouse to Warehouse and the Insured Transit
Depending on the policy, marine cargo insurance may be arranged for the ordinary course of transit from the warehouse at the place of dispatch to the warehouse at the destination.
The expression “Warehouse to Warehouse” does not mean that every warehouse, every period of storage, every operation, and every risk is covered without limitation.
The named place of dispatch, commencement of the ordinary course of transit, removal for the purpose of transportation, reason for intermediate storage, storage period, destination handling, and termination of cover must be reviewed.
Prolonged storage before dispatch, manufacturing, inspection, repair, or voluntary storage during transit may require separate analysis.
Under Ex-Go-Down terms, the contractual warehouse-delivery point should be compared directly with the place of dispatch stated in the policy.
Earthquake Risk
Goods stored or transported in Japan may be exposed to earthquake, tsunami, or volcanic risks at warehouses, on roads, at ports, CFS facilities, or CY terminals.
Whether these risks are covered depends on the type of insurance, insured conditions, endorsements, accident location, and insured transit. The existence of cargo insurance does not by itself prove that earthquake loss is covered.
Property insurance, inland transit insurance, export FOB insurance, and marine cargo insurance may treat earthquake risks differently.
The place of dispatch, inland route, port storage, pre-loading stage, and required earthquake cover should be specifically disclosed when insurance is arranged.
Insufficient Packing and Product Strength
Even where delivery occurs at the seller’s warehouse, the adequacy of export packing may remain relevant if the seller packed the goods.
Damage during inland transport does not automatically establish liability of the truck carrier or freight forwarder. Shock, cargo shifting, handling accidents, inadequate securing, insufficient cushioning, inadequate product strength, and pre-existing damage must be distinguished.
Where internal damage exists without significant external damage, insufficient packing, vibration, inability to withstand ordinary transit, or latent product defects may require examination.
The seller should preserve packing specifications, materials used, securing methods, pre-shipment photographs, inspection records, weight and centre-of-gravity information, and handling instructions.
Where the buyer or freight forwarder selects the transportation method, the seller must still communicate the nature of the goods and any packing or handling limitations accurately.
Matters for the Seller, Buyer, and Freight Forwarder
| Party | Matters to Confirm | Risk if Not Confirmed | Practical Response |
|---|---|---|---|
| Seller | The precise point at which delivery and risk transfer occur inside or outside the warehouse | Liability for loading or immediate post-dispatch damage becomes unclear | Specify the place, cargo condition, loading duty, and completion point. |
| Seller | Whether it bears risk until loading on board | The seller’s pre-shipment stage remains uninsured | Consider export FOB insurance or marine cargo insurance. |
| Seller | Adequacy of export packing and condition at dispatch | Insufficient packing or pre-shipment damage is alleged after the accident | Preserve photographs, inspection records, packing specifications, and delivery records. |
| Buyer | The place at which its cargo insurance attaches | The warehouse-to-vessel stage remains uninsured | Declare the exact warehouse address, pickup point, and loading operation. |
| Buyer | Who arranges pickup, export clearance, and port delivery | The contracting chain and responsible party cannot be identified | Record the prime freight forwarder, Actual Carrier, and instructing party. |
| Buyer | Cover during CFS or CY storage and before loading on board | Loss remains uninsured even after port in-gate | Confirm intermediate storage, rollover, and vessel-change provisions. |
| Freight Forwarder | The party instructing it and the exact scope of delegated operations | It is incorrectly assumed to have guaranteed insurance or cargo condition | Clarify the quotation, work order, pickup point, and delegated scope. |
| Freight Forwarder | Cargo, outer packing, and packing condition at pickup | Pre-shipment and transit damage cannot be distinguished | Preserve photographs, driver records, receipts, and reservations. |
| Freight Forwarder | Insurance attachment and accident-notification contacts | Late notification results in lost evidence or impaired insurance rights | Confirm accident contacts and initial-response procedures in advance. |
Scope of Freight Forwarder Involvement
The five classifications used in this article are not established by law or industry-wide consensus. They serve as an analytical framework within this series to clarify the scope of freight forwarder involvement.
| Standard Five Classifications | Main Involvement in an Ex-Go-Down Transaction | Matters It Can Confirm | Potential Responsibility | Matters It Does Not Automatically Assume |
|---|---|---|---|---|
| Simple Intermediary | Introduces or communicates with the pickup carrier, shipping line, or insurance contact | Pickup time, delivery location, transport schedule, and document progress | Limited responsibility for communication error or failure to transmit instructions | Full transport responsibility or automatic compensation for an insurance gap |
| Cargo Transportation Service Provider | Provides inland transportation from the seller’s warehouse using an Actual Carrier | Contracted stage, transport terms, Actual Carrier, and receipt or delivery records | Contractual responsibility under the transportation agreement and applicable terms | Every insured loss or unlimited compensation at full cargo value |
| NVOCC / House B/L Issuer | Undertakes multimodal or sea transport and issues a House B/L | Place of receipt, port of loading, destination, and transport stage stated in the House B/L | Contractual responsibility under the House B/L and transport terms | Transfer of risk under the sales contract or coverage under the buyer’s policy |
| Door-to-Door Single Contractor | Undertakes integrated transportation from the seller’s warehouse to the buyer’s destination | All transport stages, subcontractors, storage, and handling arrangements | Contractual responsibility for the agreed door-to-door service | Unlimited liability for every accident at full cargo value |
| Agent or Coordinator for Specific Operations | Performs specific duties such as arranging pickup, CFS in-gate, or transmitting insurance information | Progress and communications concerning the delegated operation | Responsibility for failure to exercise due care within the delegated scope | Insurance design, packing inspection, or management of the entire accident stage unless delegated |
Contracting Carrier and Actual Carrier are legal or contractual status concepts and do not replace the Standard Five Classifications used in this article.
Practical operations such as pickup, loading, storage, inspection, vanning, CFS in-gate, CY in-gate, or inland delivery do not by themselves constitute a sixth classification.
Common Practical Cases
| Case | Main Cause | Documents to Review | Decision Point | Initial Response |
|---|---|---|---|---|
| Drop during Loading at the Warehouse | The loading duty and risk-transfer point are unclear | Sales contract, pickup instruction, work record, and photographs | Who loaded the goods and when delivery was completed | Stop the operation and preserve the cargo condition and work instructions. |
| Truck Overturns during Inland Transport | The seller’s and buyer’s policies do not connect | Both policies, transport order, and accident report | Who bore the risk and which policy had attached at the accident location | Give precautionary notice to both insurers. |
| Damage after CFS In-Gate | CFS receipt was incorrectly treated as the insurance changeover point | CFS receipt, policy, and work record | Whether storage and vanning formed part of the insured transit | Issue a reservation to the CFS and preserve before-and-after photographs. |
| Earthquake Damage after CY In-Gate | Earthquake risk and port storage were not confirmed | Policy terms, endorsement, CY records, and evidence of the event | Whether earthquake risk was covered and insurance remained in force | Notify the insurer and preserve the container and cargo condition. |
| Drop Immediately before Loading on Board | The seller’s termination and buyer’s attachment of insurance are unclear | Policies, handling record, and loading record | Whether the accident occurred before or after the goods were placed on board | Notify the stevedore, terminal, and both insurers. |
| Internal Damage without External Damage | Insufficient cushioning, vibration, inadequate strength, or pre-shipment damage | Packing specification, pre-shipment photographs, and survey report | Whether the cause was accidental transit damage, insufficient packing, or inherent vice | Photograph the unpacking process and arrange an independent survey. |
| Buyer Arranges Insurance Too Late | The buyer assumes insurance can be arranged after the vessel is confirmed | Application time, pickup time, and shipment date | Whether a valid insurance contract existed before the loss | Disclose the facts accurately and do not request false retrospective documentation. |
| Subrogation against an Affiliated Freight Forwarder | The waiver-of-subrogation scope was not checked | Policy, endorsement, corporate relationship documents, and transport contract | Whether the affiliated entity is included in the waiver | Explain the corporate and contractual relationship accurately to the insurer. |
| Damage during Prolonged Rollover Storage | Storage exceeds the ordinary course of transit | Vessel-change records, storage period, and policy terms | Continuation of cover, storage-extension notice, and additional premium | Notify the insurer when the rollover becomes known. |
Insurance Review Flow for Ex-Go-Down Terms
- Define the contractual meaning: Identify the place, cargo condition, and completed operation represented by Ex-Go-Down.
- Identify the risk-transfer point: Determine whether risk transfers inside the warehouse, when loading begins, when loading is completed, or when the vehicle departs.
- Identify the transport and handling contractor: Confirm whether the seller, buyer, prime freight forwarder, or another operator contracted each activity.
- Confirm termination of the seller’s insurance: Determine whether it ends inside the warehouse, on dispatch, at port in-gate, or on loading aboard.
- Confirm attachment of the buyer’s insurance: Determine whether it begins at the seller’s warehouse, delivery to the carrier, CFS or CY, or loading aboard.
- Connect each stage chronologically: Check for gaps during loading, inland transit, intermediate storage, port handling, and loading on board.
- Review cover by peril: Confirm damage, wetting, theft, earthquake, handling accidents, and intermediate storage.
- Confirm the insured and right to claim: Identify whether the seller, buyer, trader, or financial institution is protected.
- Review subrogation: Confirm treatment of carriers, freight forwarders, affiliated companies, and handling operators.
- Correct any gap: Consider earlier attachment of the buyer’s insurance, export FOB insurance, CIF or CIP, or shipment-specific endorsements.
Example 1: Cargo Dropped during Truck Loading at the Seller’s Warehouse
Assume that the contract states only “Ex-Go-Down Seller’s Warehouse” and does not define the loading obligation or point of risk transfer.
A truck arranged by the buyer arrives at the warehouse. While the seller’s forklift operator is loading the cargo, the cargo is dropped and damaged.
The parties must determine whether risk transferred when the truck arrived, when the cargo was made available, or only when loading was completed. The result under a formally incorporated EXW rule is not necessarily the same as the result under an undefined Ex-Go-Down expression.
Even where the buyer had assumed the risk, separate liability may arise from negligence of the seller’s operator.
The seller’s termination of insurance, buyer’s attachment of cover, loading-operation cover, and insurer’s subrogation rights against the operator must be confirmed. The cargo position, forklift, truck bed, and work instructions should be photographed immediately.
Example 2: Truck Overturns between the Seller’s Warehouse and the Port
Assume that the seller believes delivery was completed at its warehouse, while the buyer believes the seller bears risk until loading on board because the commercial transaction is described as FOB.
A truck arranged by the buyer’s nominated freight forwarder overturns on the way to the port, resulting in a total loss. The seller has only warehouse property insurance, while the buyer’s marine cargo policy attaches on the B/L shipment date.
The parties may have created an uninsured gap between warehouse dispatch and loading on board.
The sales contract, purchase order, quotation terms, pickup instruction, policies, and insurance applications must be reviewed. The party bearing risk at the time of the accident, the contracting party under the truck transport, and the carrier’s liability limitations must then be determined.
Even where the carrier is liable, recovery may be limited below the full cargo value. Cargo insurance and carrier liability are not substitutes for each other.
Example 3: Earthquake Damage after CFS In-Gate but before Loading on Board
Assume that the cargo has been delivered from the seller’s warehouse to a CFS and is waiting for vanning when an earthquake causes it to overturn and suffer damage.
The buyer assumes that marine cargo insurance applies because the goods have entered the port. However, the policy attaches only when the goods are loaded on board. The seller considers the risk transferred at warehouse delivery and has not arranged export FOB insurance.
The insurance gap results from treating CFS in-gate as equivalent to attachment of insurance.
The CFS receipt time, accident time, storage position, planned vanning, attachment of insurance, earthquake cover, and CFS operator’s custody must be confirmed.
Where the earthquake is the direct cause and no negligence of the CFS operator exists, liability recovery alone may not compensate the loss. The case illustrates the importance of cargo insurance that includes the relevant natural-hazard stage.
Common Misunderstandings
| Misunderstanding | Correct Approach | Practical Consideration |
|---|---|---|
| Ex-Go-Down is the same official Incoterms® rule as EXW | Ex-Go-Down is non-standard, while EXW is an official Incoterms® rule. | Do not treat them as synonyms. Define Ex-Go-Down contractually. |
| Once the goods are delivered at the warehouse, only the buyer can be responsible | Risk transfer, negligence during loading, and contractual liability are separate issues. | Specify the loading duty and delivery-completion point. |
| Under FOB, the buyer’s insurance automatically begins at the seller’s warehouse | The buyer’s insurance attaches under the policy and may begin only on loading aboard. | Confirm that no gap exists after the seller’s insurance ends. |
| A freight forwarder arranging transport must compensate the full loss | Liability and amount depend on the contract, applicable terms, cause, and limitation of liability. | Do not confuse cargo insurance with freight forwarder liability. |
| Marine cargo insurance automatically begins at CFS or CY in-gate | CFS or CY receipt is not necessarily the attachment point. | Confirm the place of dispatch, attachment, and storage terms. |
| CIF or CIP covers every accident | The seller’s duty to procure insurance does not determine every covered peril, exclusion, or duration. | Confirm whether the insured conditions match the cargo exposure. |
| Warehouse to Warehouse covers every accident inside any warehouse | The ordinary course of transit, named locations, attachment, termination, and storage conditions may limit cover. | Review pre-transit and voluntary storage separately. |
| Earthquake loss is always covered under cargo insurance | Treatment of earthquake risk varies by insurance type, condition, and endorsement. | Confirm inland and port-stage earthquake cover specifically. |
| Internal damage without external damage cannot be a transport accident | Vibration, shock, insufficient internal securing, and product weakness may all require investigation. | Preserve photographs and survey records from before unpacking. |
| Duplicate seller and buyer insurance eliminates all problems | The greater danger is a period in which neither policy applies. | Compare both attachment and termination points chronologically. |
Pre-Contract and Insurance Decision Checklist
| Review Stage | Party to Consult | Matters to Confirm | Action if a Problem Exists |
|---|---|---|---|
| Agreement of Sales Terms | Seller and buyer | Named place, delivery condition, and risk-transfer point under Ex-Go-Down | Replace vague wording with a specific contractual definition. |
| Loading Arrangement | Seller, buyer, and pickup operator | Who loads the vehicle and who supervises the operation | State the loading duty, cost, and accident allocation expressly. |
| Transport Arrangement | Prime Freight Forwarder | Pickup point, time, transport stage, CFS or CY, and vessel schedule | Correct the quotation and work instruction. |
| Seller’s Insurance Review | Seller’s insurer or insurance agent | Warehouse, loading, inland transport, and pre-loading cover | Consider export FOB insurance or a shipment-specific endorsement. |
| Buyer’s Insurance Review | Buyer’s insurer or insurance agent | Attachment, place of dispatch, inland transit, storage, and earthquake risk | Move attachment to the seller’s warehouse or actual pickup point. |
| Connecting Both Policies | Seller’s and buyer’s insurance representatives | Termination of the seller’s policy and attachment of the buyer’s policy | Cover the gap through an endorsement or separate policy. |
| Packing Review | Seller, packer, and freight forwarder | Transport method, weight, centre of gravity, securing, and handling limitations | Strengthen packing, arrange a survey, or seek Conditional Acceptance. |
| Use of Affiliated Companies | Insurer and legal department | Subrogation, waiver of subrogation, and named affiliated entities | Confirm the required endorsement and exact legal names. |
| Shipment Delay | Freight forwarder and insurer | Rollover, prolonged storage, route change, and continuation of cover | Notify the insurer and confirm any required extension. |
Accident Decision Checklist
| Review Stage | Party to Consult | Matters to Confirm | Action if a Problem Exists |
|---|---|---|---|
| Immediately after Discovery | Site representative and carrier | Location, time, cargo condition, outer packing, and surrounding circumstances | Stop the operation and preserve photographs, video, and records. |
| Insured Transit Review | Insurer or insurance agent | Whether the accident location falls within the insured transit | Give precautionary notice to both the seller’s and buyer’s insurers. |
| Risk-Transfer Review | Seller, buyer, and legal department | Which party bore the contractual risk at the accident time | Compare the contract, purchase order, and physical delivery records. |
| Operational Responsibility | Freight forwarder, carrier, and warehouse | Who performed the operation and under whose instruction | Issue a reservation and preserve contracts and work records. |
| Cause Investigation | Surveyor and manufacturer | Transport accident, insufficient packing, inadequate strength, or pre-shipment damage | Arrange an independent survey and do not dispose of damaged goods. |
| Earthquake or Natural Hazard | Insurer and facility operator | Earthquake cover, evidence of the event, facility damage, and storage conditions | Preserve official records and site evidence. |
| Quantum of Loss | Seller, buyer, and insurer | Invoice value, repair cost, replacement cost, salvage, and additional charges | Obtain approval for mitigation and disposal measures. |
| Recovery | Insurer and legal counsel | Liability of the carrier, freight forwarder, warehouse, or handling operator | Issue written notice and preserve evidence before the applicable time bar. |
When Specialist Maritime Counsel Should Be Used
Ordinary insurance-stage reviews and minor losses may often be handled through coordination among the insurer, insurance agent, freight forwarder, and carrier.
Specialist counsel experienced in maritime transport, international sales, or cargo insurance should be considered in the following situations:
- The seller and buyer dispute the contractual meaning of Ex-Go-Down.
- A substantial loss has occurred and the party bearing the risk cannot be identified.
- The insurer relies on attachment of cover, ordinary course of transit, insufficient packing, or disclosure as a ground for declining the claim.
- The carrier, freight forwarder, warehouse, and handling operator deny responsibility against each other.
- The application of a waiver-of-subrogation clause or recovery against an affiliated company is disputed.
- Governing law or jurisdiction involving a foreign buyer, insurer, or carrier must be determined.
- Urgent action is required concerning a time bar, limitation of liability, or preservation of evidence.
Summary
Ex-Go-Down is a non-standard trade expression that may be used for delivery at a warehouse or designated storage place. It is not synonymous with EXW, which is an official Incoterms® rule.
An Ex-Go-Down contract should specify the named place, condition of delivery, loading duty, transfer of risk, export clearance, inland transport, and port-delivery arrangements.
The most important requirement is to examine the contractual risk-transfer point and attachment of cargo insurance separately. Even where risk transfers to the buyer at the seller’s warehouse, the warehouse-to-vessel stage may remain uninsured if the buyer’s policy attaches only on loading aboard.
Where the seller bears risk until loading under FOB or CFR, export FOB insurance or equivalent cover should be considered for the seller’s warehouse-to-vessel stage. Where the buyer bears risk from the warehouse, the buyer’s policy should attach at the actual pickup point.
Changing the transaction to CIF or CIP does not automatically remove every gap unless the policy’s place of dispatch, attachment, insured conditions, and intermediate storage are properly arranged.
After an accident, the parties should confirm the accident location, risk-transfer point, attachment of insurance, transport and handling contractor, condition at dispatch, and cause of loss in that order.
Risk management under Ex-Go-Down terms depends not on the label “warehouse delivery,” but on mapping every stage from the seller’s warehouse through loading on board and confirming that the seller’s and buyer’s insurance connect without interruption.
