a chinese exporter discusses insuring an order with an american buyer.
exporter : of course, we'll need to insure your shipment of baby coaches.
importer ： what is the primary purpose of insurance?
exporter ： it protects against damage or loss of goods during shipping.
importer ： a business acquaintance told me that you're an experienced exporter. why don't you explain how goods are valued for insurance purposes? i suppose there's more than one factor that goes to make up insured valuation.
exporter ： yes, the primary factor is the cost of the goods at the point of delivery. then, too, it depends on whether goods are shipped f.o.b. or ex-factory1.
importer ： i'd like to hear something about those unfamiliar terms.
exporter ： f.o.b. means free on board. this means the seller is responsible for delivery of the goods to the carrier tm, and from there the buyer is responsible.ex-factory means from the point of origin. this means the buyer pays all shipping costs from the factory.
importer : how should we go about shipping the baby coaches?
exporter : our firm uses a freight forwarder. as soon as the order is ready, my company issues an order to our freight handler. they prepare all the documents needed for shipping, including the certificate of insurance.