Who Must Insure the Cargo? Incoterms, Clearance and Claims Under Kenya's Digital Marine Cargo Rule

Enforcement began on 1 November 2026. The practical question now is a legal one: whose obligation is the cover, and what happens when it is missing?

By Sidoman  |  Tuesday, 3 November 2026

Since Sunday, 1 November 2026, the Kenya Revenue Authority has been enforcing digital marine cargo insurance at the point of clearance. In its public notice of 22 October 2026, KRA said every incoming consignment must be covered by a valid policy issued by an insurer licensed by the Insurance Regulatory Authority (IRA), that the certificate must pass through the Digital MCI System to iCMS before the declaration is lodged, and that consignments failing these requirements will be blocked from clearance.

We covered the step by step buying process last week in Digital Marine Cargo Insurance Is Now a Clearance Requirement. This column looks at the legal questions that follow: who carries the obligation, how it fits with the Incoterms in your sales contract, what a block at clearance really means, and how local cover affects a claim.

The obligation sits with the importer

The rule is not new. Section 16A of the Marine Insurance Act (Cap. 390), added by the Finance Act, 2017, requires a person with an insurable interest in marine cargo imported into Kenya to insure it with an insurer licensed under the Insurance Act (Cap. 487). Section 20(4) of the Insurance Act restricts placing Kenyan insurance business with an insurer that is not licensed in Kenya.

What has changed is the enforcement tool. The certificate is now issued against an active Import Declaration Form and sent electronically to iCMS, so customs can check it before the entry proceeds. The legal burden falls on the importer as the party with the insurable interest. In practice the clearing agent checks it, but the agent cannot make up for cover that was never placed.

Incoterms: who insures under your contract

Incoterms are contract terms between buyer and seller. They decide who arranges carriage and insurance and when risk passes. They do not override Kenyan law. That is where many importers now find a gap.

• CIF and CIP. Under Incoterms 2020 the seller must buy insurance for the buyer's benefit, minimum cover under Institute Cargo Clauses (C) for CIF and Clauses (A) for CIP. That policy is usually placed abroad, so on its own it will not produce the Kenyan digital certificate customs now looks for.
• CFR and CPT. The seller pays freight, but insurance is left to the buyer. Local cover fits naturally here.
• FOB, FCA and EXW. The buyer arranges carriage and insurance, so the importer can place the Kenyan policy from the start of the transit.
• DAP, DPU and DDP. The seller carries the risk to destination. Even so, confirm with your insurer and clearing agent how the local requirement will be met for the consignment before you sign.

The commercial risk is paying for cover twice: once inside a CIF price and again for the local policy. Before the next order, ask the supplier to quote on terms that leave insurance to you, or agree in writing how the foreign premium will be treated. Changing terms also moves risk and cost, so read the whole contract, not only the three letters.

What a block at clearance means

KRA's notice is short: consignments that fail the requirements will be blocked from clearance. It does not set out a paper alternative or a grace period for cargo already in transit. A blocked entry means the goods stay under customs control until the certificate is in place. Meanwhile port storage and container demurrage can keep running under the terms of the terminal and the shipping line, and those costs are commercial, not set by the insurance rule.

A payment receipt or a PDF in your inbox is not the same as a certificate received in iCMS. If the record is missing, ask the insurer or portal to trace the transaction, keep the error message and reference, and have your clearing agent check the record against the correct IDF.

Claims: why local cover matters

The point of cargo insurance is the claim, not the certificate. A Kenyan policy means a Kenyan insurer, Kenyan law and local claims handling. Whatever the policy, the same habits protect your position:

1. Read the policy wording and the Institute Cargo Clauses it uses, including exclusions for poor packing and delay.
2. Inspect cargo on arrival and note any damage or shortage on the delivery documents.
3. Give written notice to the carrier and the insurer promptly, within the time limits in the contract of carriage and the policy.
4. Arrange a survey before damaged goods are moved or disposed of, unless the insurer agrees otherwise.
5. Keep the bill of lading or air waybill, invoice, packing list, IDF, certificate and payment record together.

If a vessel declares general average, cargo owners are asked for security before release. A valid local policy lets the insurer provide that security rather than the importer paying a cash deposit.

Common mistakes we see

• Assuming a supplier's CIF insurance satisfies the Kenyan rule.
• Buying cover only when the ship is near Mombasa, leaving the earlier voyage unprotected.
• Letting the IDF, invoice and certificate details drift apart.
• Treating small air consignments as exempt. The notice speaks of all incoming consignments.
• Under insuring by declaring a low value, which can reduce a claim.

Closing

The digital check makes an old legal duty visible at the moment it matters most. Read your sales terms, place cover early with an insurer licensed by IRA, and confirm the record has reached iCMS before the entry is lodged. That way the cargo moves when the paperwork says it can.

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Sources

1. Kenya Revenue Authority, Enforcement of Marine Cargo Insurance, public notice of 22 October 2026: kra.go.ke
2. Marine Insurance Act, Cap. 390 (Kenya), section 16A: Kenya Law
3. Insurance Act, Cap. 487 (Kenya), section 20
4. International Chamber of Commerce, Incoterms 2020
5. Pulse Kenya, How to buy Digital Marine Cargo Insurance cover: pulse.co.ke

General information, not legal advice. Confirm current KRA and IRA guidance for your consignment.

Sidoman Logistics, Mombasa