Unless otherwise stipulated in the letter of credit (L/C), the exporter's complete name and address is entered in the field (NAME OF THE ASSURED). The exporter endorses the insurance document in blank---without specifying to whom the document is endorsed---before presenting it to the bank.
 

(2)
" AMOUNT INSURED "
 

Amount of Insurance Coverage
 

Unless otherwise stipulated in the letter of credit (L/C), the minimum amount of insurance coverage the insurance document must indicate should be the CIF or the CIP value of the goods, as the case may be, plus 10%.

If the CIF or the CIP value cannot be determined, the minimum amount of insurance coverage would be 110% of the amount requested under the L/C for payment, acceptance or negotiation, or 110% of the total amount of the invoice, whichever is the greater.

The insurance coverage of 10% more than the CIF or the CIP value is intended as insurance against the loss of expected profit.

The L/C may call for an amount of insurance coverage over 110% as settled between the exporter and importer, for example, 120% CIF value or 130% CIP value.

In the case of trade terms DDU and DDP, the insurable interest in the goods is not transferred to the importer and the amount of insurance coverage depends on the exporter's requirement.

In the case of a transferable letter of credit transferred to the second beneficiary, the percentage of insurance coverage may be increased to provide the amount of cover stipulated in the original L/C.

In the sample letter of credit the amount of insurance coverage required is 110% CIF value, as such enter "USS$27,500.00" in the field (AMOUNT INSURED).

 

(3)
" TERMS OF INSURANCE COVERAGE (Clauses) "

 

If the trade terms call for insurance, the letter of credit (L/C) normally will stipulate the type of insurance required and the additional risks which are to be covered, if any. The terms "usual risks", "customary risks" or similar imprecise terms should not be used in the L/C.

In the sample letter of credit the DEF Imports requires insurance covering Institute Cargo Clauses (A), plus the additional risks Institute War Clauses and Institute Strikes Clauses.

Unless otherwise stipulated in the L/C, the insurance document which indicates that the cover is subject to a franchise or an excess is acceptable.
 

(4)
" LATEST ISSUING DATE OF INSURANCE POLICY "
 

The insurance policy or insurance certificate, as the case may be, must bear a date of issuance not later than the date of loading on board or dispatch or taking in charge as indicated in the transport document, unless otherwise stipulated in the L/C.