Who insures the cargo under each Incoterm?
The Incoterm in your contract decides where the risk passes from seller to buyer, and whether the seller must buy insurance. For Kenyan imports, the law adds one rule: the cover that counts must come from a Kenyan-licensed insurer. So importers now usually buy on FOB, FCA or CFR terms and insure the goods themselves in Kenya. Our marine cargo insurance guide covers the rest.
Incoterms at a glance for a Kenyan importer
| Incoterm | Risk passes to you | Who buys insurance | What it means for you |
|---|---|---|---|
| EXW (Ex Works) | At the seller's premises | You | Insure from the seller's warehouse in Kenya |
| FCA (Free Carrier) | When handed to your carrier | You | Insure in Kenya from that point |
| FOB (Free on Board) | Once loaded on the ship | You | Insure in Kenya from the port of loading |
| CFR / C&F (Cost and Freight) | Once loaded on the ship | You | The seller pays freight; you insure in Kenya |
| CIF (Cost, Insurance, Freight) | Once loaded on the ship | The seller (minimum cover) | Foreign cover does not satisfy the rule: you pay twice |
| CIP (Carriage and Insurance Paid) | When handed to the first carrier | The seller (all-risks cover) | Same problem as CIF for imports |
| DAP / DPU (Delivered) | At the named place | The seller, by choice | You still need a Kenyan certificate to clear |
| DDP (Delivered Duty Paid) | At your door | The seller | The seller must arrange Kenyan cover for the import |
- Risk passes to you
- At the seller's premises
- Who buys insurance
- You
- What it means for you
- Insure from the seller's warehouse in Kenya
- Risk passes to you
- When handed to your carrier
- Who buys insurance
- You
- What it means for you
- Insure in Kenya from that point
- Risk passes to you
- Once loaded on the ship
- Who buys insurance
- You
- What it means for you
- Insure in Kenya from the port of loading
- Risk passes to you
- Once loaded on the ship
- Who buys insurance
- You
- What it means for you
- The seller pays freight; you insure in Kenya
- Risk passes to you
- Once loaded on the ship
- Who buys insurance
- The seller (minimum cover)
- What it means for you
- Foreign cover does not satisfy the rule: you pay twice
- Risk passes to you
- When handed to the first carrier
- Who buys insurance
- The seller (all-risks cover)
- What it means for you
- Same problem as CIF for imports
- Risk passes to you
- At the named place
- Who buys insurance
- The seller, by choice
- What it means for you
- You still need a Kenyan certificate to clear
- Risk passes to you
- At your door
- Who buys insurance
- The seller
- What it means for you
- The seller must arrange Kenyan cover for the import
Under Incoterms 2020, CIF only obliges the seller to buy ICC (C) cover; CIP obliges ICC (A).
Why CFR now suits Kenyan importers
The Shippers Council of Eastern Africa has advised Kenyan importers to buy on CFR rather than CIF terms, so the supplier pays the freight and the Kenyan buyer insures locally without paying for insurance twice.
Source: The Star, 3 July 2026
Placing Kenyan business with an insurer that is not licensed in Kenya, without the Commissioner's prior written approval, is an offence: a fine of up to KES 5 million, up to five years in prison, or both (Insurance Act, s.20(1) and (4)).
Source: Insurance Act (Cap 487), s.20
Buying on CIF? What to do
- Ask for a CFR quote Most suppliers will quote cost and freight, without their insurance.
- Insure in Kenya Buy local cover against your IDF, from the port of loading or the supplier's warehouse.
- For goods already shipped Keep the supplier's policy for the voyage, and buy the Kenyan certificate you need to clear. Tell us the dates; we will price it correctly.
- Update your contracts Change the default terms with regular suppliers so every new order is CFR or FOB.
Who holds the insurable interest?
Everyone with an interest in a marine adventure has an insurable interest, and it only has to exist when the loss happens, not when the cover is bought (Marine Insurance Act, ss.5 and 6).
In practice that is the seller until the risk passes under the Incoterm, then you. A bank financing the goods under a letter of credit also has an interest and will ask for the certificate.
Frequently asked questions
My supplier already insures the goods on CIF. Do I still need Kenyan cover?
Yes. A foreign policy arranged by your supplier does not meet the Kenyan rule, and customs will look for a local digital certificate. To avoid paying twice, ask the supplier to quote CFR (cost and freight) and buy the cover in Kenya.
Who insures the goods if I buy FOB?
You do. Under FOB the risk passes to you once the goods are loaded on the ship at the port of shipment, so your Kenyan cover should start there, or at the supplier's warehouse if you also want the inland leg in the supplier's country covered.
Is marine insurance mandatory in Kenya?
Yes, for imports. The Marine Insurance Act (s.16A) and the Insurance Act (ss.2 and 20) require marine cargo cover on goods imported into Kenya to be placed with a Kenyan-licensed insurer, unless the Commissioner of Insurance grants an exemption. Personal effects of returning residents are excluded. Exports are not caught by the rule.
Can I buy marine cover after my goods have shipped or arrived?
You can still buy the certificate you need for clearance, but cover bought after a loss has happened will not pay for that loss, and some insurers will only cover the rest of the journey. Buy as soon as your IDF is registered, before the goods leave the supplier.
Does the local marine insurance rule apply to exports?
No notice issued so far applies it to exports. The Insurance Act names imports only, and the digital certificate is enforced through import declarations. Exporters who sell on CIF or CIP terms still need cargo cover, and can buy it from a Kenyan insurer by choice.
What value should I insure my cargo for?
Most insurers expect the CIF value plus 10%. Some accept 10% to 20% for clearing, duty and other costs. If you insure for less than the goods are worth, the insurer can reduce a claim in proportion, so do not under-declare to save premium.
Changing your terms to CFR?
Tell us your supplier, goods and value. We price Kenyan cover from the port of loading or the supplier's warehouse.
Licensed by IRA · No obligation · We reply within 1 hour
Sources
- Marine Insurance Act (Cap 390), s.16A
- The Star, 3 July 2026
- Insurance Act (Cap 487), s.20
- Marine Insurance Act (Cap 390), ss.5–6
- Insurance Act (Cap 487), s.2
Facts and published prices checked 18 Oct 2026; last reviewed October 2026 by Naveah Capital. Rates shown are market estimates before levies, not a quote or a promise. Naveah Capital Insurance Agency is an IRA-licensed insurance agency in Nairobi; this page is general information, and your policy wording decides your cover.
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