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Calculation of insurance amount in case of exports

Saurabh Toshniwal (ca final) (2358 Points)

08 January 2020

how to calculate insurance premium amount in case of exports by sea route in container cargo.

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CS M Pota (Company Secreatary) (3180 Points)
Replied 09 January 2020

Dear Saurabh,

Insurance in export is applicable only if the shipment is on CIF basis.In calculation of Insurance you need to consider only value of premium of the Insurance suppose you have a specifice shipment policy which means you have take policy for you cuurnt shipment and the vale of shipment is in INR 100000 and for that you have paid insurance premium INR 100 then you need to show Insurance INR 100 or the same in FCY (in premium many person take all the value like GST and Stapm duty too) and many people take only amount of premium only.

However if you have open policy of insurance then you need to take prorata insurance premium like if you have open policy for export for the year April to March INR 10,00,000 insured value and you have paid premium INR 1000. Now your your Shipment value is INR 100000 then your premium will be on prorata basis like INR 1000 premium/INR 10,00,000 insured value X INR 100000 shiment value =INR 100.