Dr. Hakan ÖzcanClaims and Subrogation Group ManagerDemir Insurance

CMR and Insurance Relations

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Insurance:A definition of insurance is: To insure is to transfer the risk one runs with certain activities to another.

The transfer and the acceptance of risk is called to insure or even better to close an insurance agreement.

The person transferring the risk is the insured party or policyholder.The person or the object that has been insured is the insured person or the insured object.

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Agreement:

An agreement is an understanding with juridical consequences. An agreement is not obligation but creates an obligation, or in other words obligation arise from an agreement. An obligation leads to liabilities for the parties involved and should be fulfilled under normal circumstances.

With an insurance agreement one party has to pay, the other party hasto pay out.

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Liability:Liability results when one open (legal, natural or a collaboration) holds another liable and brings a charge against the other party Responsibility is made up of:

• Contract (culpability)• Wrongful act• Wrongful enrichment• Due payment• Caretaking

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Transport Insurance:Transport always starts with an agreement between the seller and the buyer. A sales agreement is made up of the terms of payment and the delivery terms.• “Who” can be the seller or the buyer• “Who” (buyer or seller) will take care of documents• “Who”(buyer or seller) will take care of the transportation• “Who”(buyer or seller) will take care of the insurance• “Where” (at which point of the transportation) will the risk be

transferred to the seller to the buyer.• Parties (seller or buyer) can choose to make agreement on this

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Transport documents:

1. CMR2. General Transport Conditions3. Bill of Lading (B/L)4. Warsaw Convention5. International convention relatieve aux transport internationaux

ferrodiares (codif)

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Types of Transport Insurance:

1. The Separate Post Insurance

2. Own Transport Insurance Policy

3. Turnover Policy

4. Declaration Policy

INSURANCEINSURANCEThe interests that are covered within the transport branch:1. Insuring Casco2. Insuring expenditure that is made to equip the vehicle3. Insurance of the freight rate4. Insurance of the contribution to general average

insurance5. Insurance of various liabilities6. Incidental insurance

CMR ConventionCMR Convention

CMRCMRRoad transport operators carrying goods for rewards on International road haulagejourneys must comply with the “Conversation on the Contract for the InternationalCarriage of Goods by Road” (Contrat DeTransport International De Marchandise

ParRoute) commonly referred to as the CMR Convention. The CMR Convention dates from 19 May 1956 and became effective on 2 July

1961.Almost every country in Europe has signed the CMR Convention (In recent yearsMorocco and Kazakhstan)

CMRCMRGoal CMRThe CMR convention defines the carriers’ liability and the documents to be carried onvehicles engaged in the international movement of goods between different countriesof which at least one is a party to the CMR Convention. The convention furtherdefines also some liabilities of the sender and the consignee. Sender The sender is the person with whom the carriers has made an agreement. Bear inmind that this person is not always the same as the person who is stated as sender onthe consignment note. CarrierThe carrier is the person that actually transports the goods from A to B

CMRCMRLiability

Carrier’s LiabilityThe carrier is liable for the total or partial loss of the goods and for any damage to the goodstaking place between the time when he takes over the goods and the time of delivery, as well asfor any delay in delivery. The carrier’s liability for claims resulting from loss of or damage to the goods carried isdetermined by comparison with a measure known as “Special Drawing Rights” (SDRs), wherebycompensation must not exceed 8.33 SDR per kilogram of gross weight short (gws)

ConsigneeThe consignee is the person stated as such on the consignment note and who receives the goods.

CMRCMRWhat is SDR ?

Special Drawing Right: An artificial currency unit based upon several national currencies.

SDR serves as the official monetary unit of several international organizations including IMF.

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ApplicationThe CMR Convention automatically applies to every contract for the international carriage of goods by road in vehicles for reward between different countries of which at least one is a party to the convention, evenwhen the vehicle containing the goods is carried over part of its journey bysea, rail or inland waterway. For the CMR Convention to apply, there must be clear evidence of a Contractfor the international journey at no charge would not be covered by CMR as it isoutside of a contract of carriage as specified in the Convention.

CMRCMRApplication

The CMR Conventiotion has other more specific exemptions. Its terms do not apply to:

• Own-account operations which involve international journeys;• Furniture removals;• Funeral consignments which are transported abroad;• Carriage under an international postal convention;• Cabotage journeys (i.e. Internal journeys within a country by a road

haulier from another country.)

CMR INSURANCECMR INSURANCECMR (Overseas Carrier’s Liability) Insurance

CMR Insurance covers the liabilities born when the transporter is faultyaccording to CMR convention. Within the conditions and limits in the policy, it covers legal liabilitiesnamed by the CMR Convention. (Convention on the contract for the international carriage of goods by road) about the goods andcommodities transported by companies operating on international landroads.

CMR INSURANCECMR INSURANCECMR (Overseas Carrier’s Liability) Insurance

International land road transporters are liable for the faults of their employees based on CMR convention of the sub-carriers they used fortransportation, and their faults while performing their duty. This liability commences at the moment of receiving the goods to betransformed and continues until the delivery completed.

The CMR Insurance is not the insurance of the goods in transport butcovers the liability when the transporter is faulty according to CMRConvention within the limits determined by the convention.

CMR INSURANCECMR INSURANCEThe Principal Conditions of The Convention

The convention applies to every contract for carriage of goods, whetherwholly by road or partly by road partly by rail, sea or inland waterway,

aslong as the goods remain in the original vehicle, on a journey from onecountry to another, one of which is a contracting party to the convention.

CMR INSURANCECMR INSURANCEThe Principal Conditions of The Convention

* The carrier is responsible under the convention for the actions and omissions of his agents and any other persons whose services are used in carrying out the movement.

* If the goods are carried under a single contract in different vehicles or are divided owing to their different nature, the carrier or the sender can specify that a separate consignment note should be made out for each vehicle or each load of goods.

CMRCMRThe Principal Conditions of The Convention

The contract of carriage is confirmed by the making out of a consignment note. The CMR Convention does not give an answer to thequestion who has to make out the consignment note; it can be doneeither by sender or by the haulier.

The consignment note is made out in three original copies signed by thesender and by the carrier and a normally a fourth copy for the carrier.These signatures may be printed or replaced by the stamps of thesender.

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The first copy (red) is handed over to the sender after the carrier has received the goods

The second copy (blue) is handed over to the consignee when the goods have reached their destination

The third copy (green) for the carrier

The fourth copy (black) for the carrier

CMR INSURANCECMR INSURANCEThe Principal Conditions of The Convention

* The consignment note must contain certain specified details such as marks and numbers; numbers and kind of packages; descriptions of goods; gross weight; volume; etc. And may also contain additional information to use to the parties to the contract. It must state that the carriage is subject to CMR.

* The sender is responsible for all expenses, loss and damage sustained by the carrier as a result of default in completion of consignment note in relation to information supplied by him.

CMR INSURANCECMR INSURANCEThe Principal Conditions of The Convention

* On receipt of the goods, the carrier must check the accuracy of the details shown in the consignment note particularly as to the number of packages, the apparent condition of the goods, their packaging and how they are marked.

* The sender is liable to the carrier for damage and expenses due to defective packing of the goods unless the defects were known to the carrier when taking over the goods and he indicated this fact by way of a “reservation” on the note.

CMR INSURANCECMR INSURANCEThe Principal Conditions of The Convention

* The sender much attach to the consignment note or make available to the carrier the necessary documents to complete customs formalities.

* If the carrier cannot follow the instructions on the consignment note for any reason, he must ask the sender or the consignment note for any reason, he must ask the sender or the consignee, depending on who has the right of disposal, for further instructions.

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