Insuring Your Olive Oil Cargo: What to Cover

In brief. Two insurances protect an olive oil operation, and they cover different risks. Transport (cargo) insurance covers the goods in transit — breakage, damage, loss, theft — from the departure warehouse to the arrival warehouse. Credit insurance (on the exporter's side, via COTUNACE in Tunisia) covers the client's non-payment. Always check who must insure according to the incoterm: under CIF the seller insures; under FOB or EXW, it is up to you to do so.

A 22,000-litre flexitank travelling by sea passes through dozens of handlings, a transhipment, sometimes a storm. And once delivered, there remains the risk that the client does not pay. Insuring an olive oil cargo means covering these two distinct dangers: transport and credit. Here is what each insurance covers — and who must take it out.

What insurances for an olive oil cargo?

Two policies, two risks:

1. Transport (or cargo) insurance protects the goods during the journey against physical damage and loss.
2. Credit insurance protects the seller against the buyer's non-payment.

They do not replace each other: a cargo can arrive intact but remain unpaid, or be paid in advance but damaged in transit. A well-covered operation addresses both.

Transport insurance: covering the goods in transit

What it covers

Transport insurance compensates the physical damage and loss suffered by the cargo during transport: damage, breakage, total or partial loss, theft, damage related to transhipment or a maritime event. For oil in a flexitank or IBC, the typical claims are leakage, contamination, or loss of the container.

The level of cover depends on the Institute Cargo Clauses (ICC), the international standard:

Level	Scope	For whom
ICC (A)	"All risks" (the broadest)	Recommended for bulk oil
ICC (B)	Listed risks, intermediate	Partial cover
ICC (C)	Major risks only (the most restricted)	Minimum

For a sensitive food product like olive oil, all-risks cover (ICC A) is generally the most suitable: it does not leave you discovering, after a claim, that the precise cause was not on the list.

The insured value

The international practice is to insure the value CIF + 10%: the cost of the delivered goods, increased by a fixed margin covering your costs and the loss of profit. Check that the policy indeed covers end to end ("warehouse to warehouse"), not just the sea journey, because quayside handlings concentrate a share of the claims.

Who insures? It depends on the incoterm

This is the most often neglected point:

• CIF: the seller takes out the insurance up to the port of destination. Check the level of cover — CIF only imposes a minimum, sometimes insufficient.
• FOB, CFR, EXW: it is up to you, the buyer, to insure the goods. Under FOB, your responsibility begins at loading; do not leave the journey without cover.

An uninsured import because each party thought the other was handling it is a classic flaw. The incoterms guide specifies where the transfer of risk passes, and the import/export documentation lists the insurance certificate among the documents to gather.

Credit insurance: covering non-payment (COTUNACE)

The transport can go perfectly and the client never pay. That is the role of credit insurance, which protects the seller.

In Tunisia, the reference body is COTUNACE (Compagnie tunisienne pour l'assurance du commerce extérieur). It compensates the exporter in the event of non-payment, provided the buyer has been approved beforehand the sale. It is an exporter's reflex, but it concerns the buyer: if your supplier requires a COTUNACE approval or a letter of credit, it is sound practice, not distrust.

Credit insurance combines with the payment instruments seen in our article on financing the import: a confirmed letter of credit for maximum security, credit insurance to cover the residual risk.

Sidebar: the 3 angles of an insured cargo

• Buyer/importer side: insure the transport whenever the incoterm leaves it to your charge (FOB, EXW). Require the insurance certificate and check the level of cover under CIF.
• Exporter side: take out credit insurance (COTUNACE) and have the buyer approved before the sale. On a CIF, provide decent transport cover, not the minimum.
• Insurer/bank side: transport insurance covers the goods, credit insurance covers the payment, the letter of credit secures the instrument. The three add up according to the level of risk.

The mistake that leaves a cargo exposed

Believing that "under CIF, everything is covered". CIF only imposes a minimum cover (often ICC C): in the event of a claim, you may discover that the risk that occurred was not covered. Check the actual level of the policy, and supplement it if necessary. An insurance premium is trivial against the loss of a container.

FAQ

What insurances are needed to import olive oil?

Two: transport (cargo) insurance, which covers the goods against damage and loss in transit, and credit insurance (on the exporter's side, COTUNACE in Tunisia), which covers non-payment. They protect against distinct risks and add up.

What does the transport insurance of an oil cargo cover?

Physical damage and loss during transport: damage, breakage, leakage, contamination, theft, total or partial loss, from departure to arrival. The level depends on the Institute Cargo Clauses: ICC (A) "all risks" is the broadest.

Who must insure the cargo, the buyer or the seller?

It depends on the incoterm. Under CIF, the seller insures up to the port of destination. Under FOB, CFR or EXW, it is up to the buyer to insure. Never leave a journey without cover for lack of a clear agreement.

What value should you insure for a cargo?

The international practice is to insure the value CIF + 10%, i.e. the landed cost increased by a fixed margin covering costs and loss of profit. Check that the policy covers end to end, "warehouse to warehouse".

What is COTUNACE?

The Compagnie tunisienne pour l'assurance du commerce extérieur, the Tunisian export credit insurance body. It compensates the exporter in the event of non-payment, provided the buyer has been approved before the sale.

Is CIF enough to cover all transport risks?

No. CIF only imposes a minimum cover (often ICC C, major risks only). For a sensitive product like olive oil, check the actual level and require all-risks cover (ICC A) if necessary.

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Are you preparing the shipment of a container? Request a quote: we specify the incoterm, the insurance certificate and the required documents. See also how to finance your import and manage currency risk.