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7/27/2019 4. Cargo Insurance Policy
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TheThe FaculFaculty of International Business andty of International Business and
EconomicsEconomics
Cargo insurancepolicy
The best way to predict theThe best way to predict the
future is to create itfuture is to create it
EinsteinEinstein
Cosmin Jolde, Univ. Lecturer
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Content of presentation
1. Insured interest
2. The risks insured
3. Exclusions
4. Sum insured
5. Types of contracts and period of insurance
6. Modalities of a ment of remium
7. Currency
8. Claims procedure
9. Information necessary for providing an offer
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1. Insured interest
What goods can be insured?
- all the goods that are being transported, e.g. raw materials, workin progress, finished goods, equipment beeing brought to be
installed.- the intermediary storage necessary during the transport can be
covered.
Who is making the insurance? The owner of the goods, according to INCOTERMS or any other
person who has an insurable interest (e.g. a bank).
The carrier or forwarder can make their own insurance:
Carriers Liability or Forwarders Liability. In some cases the owner of the goods impose to the forwarder
or transporter to cover all the risks related to goods. Thissituation is atypical.
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2. The risks insured
Insurance conditions
The standard coverage is provided by Institute Cargo Clauses (ICC):
ICC A - All Risks
ICC B
ICC C
To the above types of coverage some additional risks can be coveredby special clauses:
+ risks specific to the nature of the goods transported (e.g.+ risks specific to the nature of the goods transported (e.g.
moisture, spotting, petrifaction, rusting etc.)moisture, spotting, petrifaction, rusting etc.) + war, civil war, revolution, riot+ war, civil war, revolution, riot
+ strike, civil commotion+ strike, civil commotion
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2. The risks insured (continued)
ICC A:
All Risks - any risks of physical loss or damage not specified but notexpressly excluded
ICC B- risks covered by ICC C plus the following:+ Earthquake+ Washing Overboard (deck cargo)+ Sea/river/lake water entering Ship, Conveyance
ICC C Fire and Explosion Overturning or Derailment of Land Conveyance Contact of Ship, Craft or Conveyance with other object
(excludes Water but not Ice) Discharge of Cargo at Port of Distress . JettisonGeneral Average Sacrifice
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3. Exclusions
Major exclusions
loss, damage or expense attributable to wilful misconduct of theAssured
ordinary leakage, ordinary loss in weight or volume, or ordinarywear and tear of the subject-matter insured
loss damage or expense caused by insufficiency or unsuitability ofpacking or preparation of the subject-matter insured
loss damage or expense caused by inherent vice or nature of thesubject-matter insured
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3. Exclusions (continued)
Special Exclusions
Theft / pilferage, non delivery - risks excluded in under clauses ICCB and ICC C.
War risks Strike , Riot and Civil Commotion
Terrorism
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4. Sum insured
Production value or invoice value
In addition to this value the following expenses can be insured:
+ cost of transport (freight)
+ duty, VAT and other expenses
+ the insurance premium
+ over-insurance up to 10 % from the value of the goods (this item
the expected profit.)
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5. Types of contracts and period of insurance
Open policy
- Efficient for a high frequency of the transports.
- Usually concluded for a year.
One-off policy
- usual for casual transports.
-warehouse.
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6. Modalities of payment of premium
Minimum and Deposit premium (usually between 70 and 80% fromannual estimated premium) at inception. The premium is adjustedat the end of the policy year based on actual transported value.
Minimum premium means that this is the minimum amountacceptable by the insurer. Deposit premium means that the amountmust be paid by the insured at the beginning of insurance.
Monthly payment of estimated premium Quarterly payment of estimated premium.
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7. Currency
Payment of premium
in ROL /RON)
in hard currency
Payment of indemnities
in ROL/RON
in hard currency, if theinvoices for the goods areissued in currency.
equivalent in ROL of theindemnity considering theexchange rate at the date ofissuance of the policy.
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8. Claims procedure
To inspect the cargo at destination. All the loss or damagesobserved at arrival must be written into the transport documents.
To notify the loss or damages to the broker or insurer.
To take al the reasonable measures to mitigate the extent of lossand to preserve the goods.
To sent Letters of Protest to all the parties involved (e.f. forwarder,.
To support the insurers representatives or designated surveyors inorder to determine the nature, cause and extent of loss/damage.
To collect all the documents relevant for the claim and which provethe extent of loss and other expenses. To send them to insurer.
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9. Information necessary for providing an offer
Description of the goods transported
Quantity / packaging list / weight / volume
Packing and labelling
Sum insured and what it contains
Routes
Places of transhipments
Frequency of transports
Supervision at place of loading / discharging
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Thank you!Thank you!Thank you!Thank you!