Purpose
The Cargo Insurance Document serves to provide evidence of insurance coverage, fulfilling various international trade and regulatory needs. Depending on context, it may be presented as:
- Certificate of Insurance and Insurance Policy: typically issued at the shipper’s request, often to fulfil Letter of Credit requirements.
- Debit Note (of insurance): typically issued in specific countries upon the consignee’s request to comply with import customs requirements.
Sender/Receiver
Issued by the insurer or a broker (acting on behalf of the insurer), with input typically provided by the Assured through the insurer’s online portal.
Received by the shipper or consignee and may subsequently be forwarded to a bank or customs authorities as needed.
Legal framework
While legal recognition and negotiability may vary by jurisdiction, the cargo insurance document adheres to established international practices, despite the absence of specific international conventions or rules governing its contents or usage. Both ICC Uniform Rules for Documentary Credits (UCP) and Incoterms® reference these insurance documents, reinforcing their significance in international trade and commerce.
Usage
In 2023, cargo insurance documents are primarily issued in PDF or paper format, with limited structured data exchange due to the scarcity of platforms equipped for this purpose. Unfortunately, there are no available statistics for estimating the global issuance of these documents.
Key standards
During the 1990s, “Certificate of Insurance” and “Consignment Advice for Insurance” functional messages, based on the United Nations/Electronic Data Interchange for Administration, Commerce and Transport (UN/EDIFACT) message IFTMCA, were introduced. However, there have been no further EDI activities on insurance documents since then, suggesting limited practical use of these standards. To align with contemporary digital platforms featuring API capabilities, a data standard for structured insurance data, pioneered by Cargo Insurance Data Association (CIDA) was introduced in 2022.
Platforms
Although insurance documents can be issued through in-house digital platforms or integrated with other software from third-party providers (such as Fermion Merimen or Oceanwide Marine Suite), platforms specifically designed for cargo insurance data are rare. Examples include Japan-based TradeWaltz which serves pan-Asian trading.
Adoption
Differing data definitions and required elements across markets is a key reason behind the slow adoption of standardised cargo insurance documents till date. A significant driver in future is the broader digitalisation of trade documents, particularly commercial invoices and bills of lading. As structured data exchange becomes more common for these documents, the demand for cargo insurance documents in structured data formats is expected to rise.
