TIẾNG ANH KINH TẾ insurance

Types of marine insurance  Hull insurance relates to the vessel and its fixtures, providing cover for loss or damage at sea.. -A voyage policy relates to a particular voyage  Cargo in

UNIT 9: MARINE CARGO

INSURANCE

What risks are these?

1. Several people were walking along when suddenly tons of

earth came crash down the hillside and blocked the road

in front of them.

+Landslide

2 Over 50,000 people in Ethiopia have died of starvation in

the past month Questions are being asked concerning the delay in the supplies of rice and grain which were recently sent to them.

+Famine

3 The winds have already strengthened considerably and the

sea is now very rough indeed As a result, ferries across the harbor have stopped sailing and all large ships have put out to sea.

+Typoon

4 The river overflowed in several places and huge areas of farming land are now several feet under water Boats are being used to rescue people in nearby village.

+Flood

5 Suddenly the ground shook beneath our feet and the tall building opposite the college began to sway Windows and doors rattled, and several bookcases in the college library came crashing down.

+Earthquake

6 Tankers full of water were sent, but it was too late to save many of the animals and crops there The whole area was like a vast desert.

+Drought

7 Smoke poured out of the crates but no one expected an

eruption A week later, however, red hot lava began to flow down the side of the mountain.

+Volcano

8 It swept onwards, covering everything in its path The

travellers had to get off their camels and lie down until it

had eventually passed.

+Sandstorm

9 Flames swept through the block of offices, burning

everything inside Two hours later only the empty shell of the building remained.

+Fire

10 The first sign if illness was a pain in the chest, followed by

a great thirst and a burning fever Few medical supplies

reached the area and consequently almost all the victims died.

+Plague

11 It must have been at least twenty feet high as it swept

towards the shore In a few seconds it destroyed all the

houses in its way, drowning everyone inside.

+Tidal wave

Other types of risks

1. Operational risks: Regulatory non-compliance, supply

chain failure, or failure of governance within an

organization

2. Financial risks: cash flow, credit or exchange risks

3. Hazards: safeguarding the health, safety of employees,

the public natural events, consequent business

interruption impact, environmental impact

4. Strategic risks: market changes, increased competition,

failure to adapt or change by an organization

5. Risks faced by the buyer and the seller when goods are

transported: loss by accident, theft, pilferage or

damaged by fire, water, deterioration, force majeure,

difficulties getting custom clearance, strikes, port

congestion

Marine insurance

 Marine Insurance covers the loss or

damage of ships, cargo, terminals, and any transport or property by which cargo

is transferred, acquired, or held between the points of origin and final destination.

Feature of marine insurance

 It is based on “Utmost good faith”

-I.e: both the insured and the insurer’s must disclosed:

- Everything which is in their knowledge and

- Can affect the contract of insurance

 It is a contract of indemnity

 Insurable interest

 Proximate cause

Types of marine insurance

 Hull insurance relates to the vessel and its fixtures,

providing cover for loss or damage at sea.

-A time policy gives cover for a specified period.

-A voyage policy relates to a particular voyage

 Cargo insurance provides cover for loss or damage of the cargo while it is in transit.

  Freight insurance provides the shipowner with indemnity in case he has to repay the charge because of his failure to

Total loss or partial loss

 Total loss: the insurer is entitle to take over what ever may remain of the subject matter

 Partial loss: subrogation is to extent of loss paid, excess recovery if any, is to be

disbursed to the insured

In marine insurance, in the case of a partial loss, or emergency repairs to the vessel, average may be declared This covers situations, where, for

example, a ship in a storm might have to jettison

certain cargo to protect the ship and the remaining cargo

“General average” requires all parties concerned in the venture (Hull/Cargo/Freight/Bunkers) to

contribute to compensate the losses caused to

those whose cargo has been lost or damaged.

'Particular Average' is levied on a group of cargo

owners and not all of the cargo owners.

Insurance premium

 Financial cost of obtaining an insurance cover, paid as a lump sum or in installments during

the duration of the policy

 A failure to pay premium when due

automatically cancels the insurance policy

which, upon payment of the outstanding amount within a certain period, may be restored.

MARINE STANDARD POLICY FORM

THE FORM CONTAINS THE FOLLOWING PARTICULARS:

 NAME OF INSURED: -POLICY NO.:

 VOYAGE OR JOURNEY: -B/L; LR/GR, RR, AWB NO.:

 TYPE OF COVER: AND DATE:

 CLAUSES ATTACHED

 INTEREST/PROPERTY : DESCRIPTION OF THE ITEM WITH

PACKING DETAILS :

 NAME AND ADDRESS OF SURVEYOR AT DESTINATION

 CLAIM SETTLING AGENT:

 PLACE WHERE CLAIM SHALL BE SETTLED:

 POLICY ISSUING OFFICE ADDRESS AND DATE:

 SIGNATURE OF AUTHORISED PERSON:

Comparison Open cover/ open policy

OPEN COVER

 OPEN COVER: FOR REGULAR SHIPMENTS

 AN AGREEMENT OF INSURANCE WITH THE INSURED

 TO GOVERN THE INSURANCE COVERAGE OF FUTURE

TRANSITS OR SHIPMENTS

 COVERAGE LIKE ICC-’A’ OR ‘B’ ETC IS AGREED,

 RATE, TERMS, WARRANTIES, CLAUSES, EXCLUSION ARE AGREED

 VOYAGE BY SEA OR AIR, TRANSHIPMENT IF ANY IS AGREED

 BASIS OF VALUATION OF GOODS IS THERE BUT NO SUM INSURED SPECIFIED IN THE OPEN COVER

 LIMIT PER BOTTOM (SENDING) AND LIMIT PER LOCATION

( ACCUMULATION OF RISK)

OPEN COVER….

 THE INSURER UNDERTAKES TO INSURE ALL SHIPMENTS DECLARED BY THE INSURED

 THE ASSURED UNDERTAKES TO DECLARE EACH AND

EVERY SHIPMENT WHICH COMES WITHIN THE SCOPE OF OPEN COVER

 PREMIUM AND STAMPDUTY PAYABLE AGAINST EACH AND EVERY SHIPMENT

 A MARINE POLICY OR CERTIFICATE OF INSURANCE SHALL ISSUED DULLY STAMP DUTY AGINST EACH DISPATCH

 A DEPOSITE PREMIUM , EQUIVALENT TO ONE TO THREE MONTH’S TURNOVER SHALL BE ACCEPTED BY INSURER

OPEN COVER…

 FOR LEGAL PURPOSE OPEN COVER IS LIKE A COVERNOTE AND THEREFORE A STAMPED POLICY OR CERTIFICATE IS ISSUED AGAINST EACH SHIPMENT

 THE ADVANTAGES ARE:

 AUTOMATIC AND CONTINUOUS COVER IN REGARD TO

COVERAGE, RATE, TERMS AND CONDITIONS AND NO NEED FOR ANY NEGOTIATION ON EACH SHIPMENT

 ANY INADVERTANT OMMISSION TO INSURE OR DELAY IN

SHIPMENT ADVICE IS IGNORED BY THE INSURER PROVIDED

THERE IS SUFFICIENT DEPOSIT

 SINCE THE RATE IS AGREED AT INCEPTION AND IT HELPS THE INSURED TO KNOW THE COST OF INSURANCE

 THE INSURER CAN CHECK THE RECORDS OF THE ASSURED ABOUT THE SHIPMENTS COMING UNDER TERMS OF OPEN COVER

OPEN POLICY

 Open Policy/ Floating Policy : A stamped document

voyage from –to, basis of valuation, Limit per sending, Rate of premium etc are mentioned on the policy

 All the shipments coming under the scope are covered

to the extent sum insured is available

shipments for 03 months or so at the commencement and can be increased subsequently but before the sum insured is exhausted

insured is exhausted

Open Policy…

 For increase in S I additional premium at rate agreed is paid

 Fresh policy if sum insured is exhausted

 Declarations are made , giving details of dispatches

made during the fortnight or month as agreed, to

Insurer and S I is reduced accordingly

 Details of dispatch:

GR/RR no Date Description of goods Qty/wt Amount

Balance

Open Policy…….

 A Certificate of Insurance is issued against

declarations for the fortnight or month as the case may

be

 Since policy is a stamped document, certificates are not stamped.

 Open policy is issued for inland transit

 At the end of the policy period, the policy is adjusted

and premium against the balance unutilized S I is

refunded

 Advantages of Open Policy:

 Automatic and continuous insurance protection

 Administrative labour is reduced

 Saving in stamp duty

Open Policy…….

 The insurer can check the records of the insured in regard to dispatches made in terms of the open

policy

 The policy can be cancelled by either party after

giving a notice of 30 days

 Location limit at any one location should not exceed

a specified amount mentioned in the open policy

conditions

Cargo insurance

 Cargo insurance is underwritten on the

Institute Cargo Clauses, with coverage on

an A, B, or C basis, A having the widest

cover and C the most restricted Valuable cargo is known as specie

Different types of marine loss

Marine Insurance Claim

Procedure

• In case of loss/damage in transit, a monetary

claim should be lodged with the carrier within the time limit to protect recovery rights

• Appointment of surveyor or claim representative

in agreement with the insurer to determine the

nature, cause and extent of loss/damage

• The surveyor informs the insurer of the

approximate value of loss incurred

• The claim procedure takes from one to three

weeks

Documents Required for

Marine Insurance Claim

• Original Invoice & packing List – if forming part of Invoice

• Document of declaration of consignment

• Damage Certificate from the carrier

• The farmer must furnish area sown

confirmation certificate, if required

How to claim

 Take immediate steps to minimize loss.

 Inform nearest office of the insurance company or claim settling agent mentioned on the policy.

 In case of damage to goods whilst on ship or port, arrange for joint ship survey or port survey.

 Lodge monetary claim with carrier within stipulated time period.

 Submit duly assigned insurance policy/certificate along with the original invoice and other documents required to substantiate the claim such as:

 • Bill of Lading

• Packing list

• Copies of correspondence exchanged with carriers.

• Copy of notice served on carriers along with

acknowledgment/receipt.

• Shortage/Damage Certificate issued by carriers.