Unit 7 Cargo Transport Insurance

7.6 Export and Import Insurance Practice and Insurance Documents • Factors to be considered P86 • Insurance documents 1. insurance policy 2. insurance certificate 3. cover note (临时保单） • premium
W.P.A= F.P.A.＋ particular average caused by natural calamity All Risks= W.P.A, + general additional risks
Coverage of F.P.A
Page 84—5 mins
Coverage of additional risks
Special extraneous risks （特殊外部风险）are risks such as on deck,
war, strikes, failure of delivery, rejection, etc.
7.3 Different Losses
Total loss Partial loss Actual total loss Constructive total loss Particular average General average
• General additional risks (Page 84) T.P.N.D (偷窃提货不着险条款） Fresh water and or rain damage clause 淡水、雨淋险条款 Shortage clause 短量险条款 Intermixture and contamination 混杂、玷 污险条款 Leakage clause 渗漏条款 Clash and breakage clause 碰撞破碎险条款 Taint of odor clause 串味险条款 Sweat and heating clause 受潮、受热 险条款 Hook damage 钩损险条款 Breakage of packing clause 包装破例险条款 Rust clause 锈损险条款
Fortuitous accidents （ 船舶意外） are events happening to the vessel
such as stranding, grounding, collision, ship sinking, fires, explosion, ship missing and so on.
7.4 insurance Coverage Under C.I.C
Basic: • FPA (平安险） • WPA （水渍险） • ALL RISKS （一切险）
Additional: • General additional risks （一般附加险） • Special additional risks （特别附加险）
Case Analysis
A consignment was shipped from Shenzhen to Singapore under all risks. The ship arrived on 20th, April and the goods were discharged on the second day and stored in a warehouse at the port of destination. The goods caught fire on the same night and were all damaged. In this case, will the insurance company compensate for the loss?
Under CFR, the seller is supposed to deliver goods past ship’s rail. The seller is responsible for the accident which happened in transit from the seller’s factory to the port of shipment. The insurance effected by the buyer covers only the losses which happen from the delivery place to the destination.
General extraneous risks （一般外部风险） are risks due to theft, rain,
leakage, shortages, breakage, dampness, mildewing, heating, taint of odor, hooking and rusting.
7.5 Commencement & Termination of Different Insurance Coverage
• ouse to warehouse clause P85
Case Analysis
An exporter in Qingdao signed a CFR contract to sell soybean to a European buyer. The buyer arranged insurance for the cargo. The cargo was damaged in a transport accident during the transit from the seller’s factory to the port of shipment. According to Warehouse to Warehouse Clause, is it reasonable for the seller to claim for compensation from the insurance company?
• Special additional risks (Page 85) War risks clause 战争险条款 Strike clause 罢工险条款 Import duty clause 井口关税险条款 Rejection clause 拒收险条款 Aflatoxin clause 黄曲霉素险条款 Failure to deliver clause 交货不到 险条款 Fire risk extension clause 火险责任扩展条款
A Small Case
A ship was transporting cargo at sea, when suddenly heavy smoke was seen coming from the ship’s hold. Thinking that the cargo was on fire, a sailor turned on the fire hose and sprayed water on the cargo. Part of the cargo was soaked and damaged. However it turned out that the engine had given off the smoke and there was no fire at all. The sailor had been mistaken. In the above case, can the partial loss be considered as general average?
Actual total loss (实际全损）means the insured goods are totally damaged, or have been lost or found valueless upon arrival. Constructive total loss （推断全损）occurs when the actual loss of the insured goods is unavoidable, or when the ship or the consignment has to be abandoned because the cost of salvage or recovery will exceed the value of the ship and the consignment upon arrival. Particular average（单独海损） is the partial loss suffered by the party whose consignment is partially lost or damaged. When the loss or damage occurs, no cargo of other parties has to be sacrificed to save the voyage. General average（共同海损） is the partial loss resulting from a deliberate act of the ship’s master, such as throwing overboard all or part of the cargo to save the ship. In this case, all beneficial parties will share the loss of the specific consignor.
Unit 7 Cargo Transport Insurance
Why do we need insurance in international trade when we transport goods abroad? Risks Losses compensation
7.1 Basic Concepts
1. 2. 3. 4. 5. Insurer (承保人） The insured (投保人） Insurance policy (保单） Insured amount (保险金额） Premium （保险费）
7.2 Different Risks
Perils of the sea Natural calamity Fortuitous accidents
7.4 insurance Coverage Under C.I.C
All Risks F.P.A. W.P.A. General Additional Risks Special Additional Risks
Basic Insurance Coverage
Additional Insurance Coverage
Extraneous risks
General extraneous risks Special extraneous risks
Natural calamity (自然灾害）refers to natural disasters such as vile
weather, tsunamis, earthquakes, volcanic eruptions, storms, lightning and so on.
criteria determining that the partial loss is a general average
• The ship or the consignment was in actual danger. • The measures taken were deliberate and reasonable. • The expenses and sacrifice were extraordinary and they are the direct result of general average act. • The expenses and sacrifice were effective