KMDkmdastur.com/wp-content/uploads/2016/07/CargoPresentation-1.pdf · Assignment of Marine ......
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KMDK.M. Dastur Reinsurance Brokers Pvt.Ltd
The only Insurance Brokers in India to be ISO 9001/2000 certified BY TUV Germany
K.M. Dastur Reinsurance Brokers Pvt.Ltd, Cambata Building, 5th Floor, 42,Jamsetji Tata Road, Churchgate, Mumbai 400020
tyPes of Marine cargo Policies
Specific Voyage policy
• Covers one single journey at a time
• Taken by one time senders
Open Policy/Open Cover• Undertaking to cover all shipments that
will be made during the year
• Features – Cargo & Voyage• Per Bottom Limit – 200% Accumulation
Clause
• Basis of Valuation
• Terms and conditions• Warranties (Strictly complied with)• Classification Clause 1/1/2001
• Declaration/Bordereaux
Annual Turnover Policy• This is no different from any open policy
except rate of premium is charged only on the sales turnover
• Does not give a free cover for transits of raw materials
• Rate for each leg of transit or weighted average of various rates for each transit
• No need to make monthly declarations to insurers
• Saving in administrative costs
insurable interest /suM insured
Insurable Interest must exist at the time of Loss and need not to have when the policy was issued.
Make good the loss – can not make profit from the loss – Indemnity
Agreed Value basis – Also called Valued policies
Most Popular Basis of Valuation – CIF + 10%
Increased Value
Assignment of Marine Certificates/Policies
allocations of costs to buyer/seller -incoterMs 2010
Incoterm 2010
Export customs
declaration
Carriage to port of
export
Unloading of truck in
port of export
Loading on vessel in port of
export
Carriage (Sea/Air) to port of
import
InsuranceUnloading in port of
import
Loading on truck in port of
import
Carriage to place of
destination
Import customs clearance
Import taxes
EXW Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer BuyerFCA Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer BuyerFAS Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer BuyerFOB Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer BuyerCPT Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer BuyerCFR(CNF) Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer
CIF Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer
CIP Seller Seller Seller Seller Seller Seller Buyer/Seller
Buyer/Seller Buyer Buyer Buyer
DAT Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer BuyerDAP Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DDP Seller Seller Seller Seller Seller Seller Seller Seller Seller SellerSeller/Not including VAT/FAT
Type of risks - Covered () not covered () A B CLoss / damage reasonably attributable to:
1. Fire or explosion
2. Vessel/Craft being stranded, grounded, sunk orcapsized.
3. Overturning/derailment of land conveyance.
4. Collision or contact of vessel, craft or conveyanceWith any external object other then water.
5. Discharge of cargo at a port of distress
6. Earthquake, volcanic eruption, lightning
7. General average and salvage charges incurred toavoid loss from any cause except those excluded
8. General average sacrifice
9. Jettison
10. Washing overboard
11. Entry of sea, lake or river water into the vessel
coMParison between the institute cargo clauses (a), (b) & (c)
A B C
12. Rainwater damage
13. Total loss of any package lost overboard ordropped whilst loading or unloading fromvessel or craft.
14. Piracy.
15. Deliberate damage or destruction by wrongful actof any person or persons, (i.e. by malicious acts)
(Can be covered by malicious Damage Clause forI.C.C (B) and (C) upon payment or extra premium)
16. In the event of frustration of the voyage resultingfrom a risk covered, extra charges incurred inunloading, storing and forwarding to destination
17. Reasonable charges for averting or minimizing lossrecoverable under this insurance and also thoseincurred, to pursue recovery rights against carriers,bailees or third parties
continued…
A B C 18. Other or extraneous perils all involving a fortuity
and from external causes, for example:
Damage as a result of shifting in heavy weather
Improper stowage
Rough handling
Breakage, leakage, denting
Heating and sweating
Rust
Hook and sling damage
Contact with mud, oils and acids, damage by other cargo
Shortage, theft, pilferage, non-delivery
Other loss/damage caused fortuitously and from external cause or causes
19. Liability under “Both to blame collision”
continued…
institute cargo clauses a - exclusions
Wilful misconduct of assured
Ordinary leakage, ordinary loss in weight, volume or ordinary wear and tear
Insufficiency of packing/unsuitability of packing
Loss/damage or expenses caused by inherent vice or nature of the subject matter insured
Loss/damage or expenses proximately caused by Delay
Loss/damage or expenses arising from insolvency or financial default of the owners managers charterers or operators of the vessel
Nuclear etc. exclusion
continued…
Unseaworthiness/unfitness of vessel craft conveyance container etc.Although the Underwriters are prepared to waive any breach of warranty where the insured is
unaware that the vessel is unseaworthy or unfit to carry the goods, they are not prepared to cover loss arising from such unseaworthiness or unfitness of the vessel or craft if the assured is aware of such unseaworthiness or unfitness at the time the goods are loaded in the vessel or craft
War Exclusion
Strikes Exclusion
additional clauses
Accumulation Clause
Paramount War Clause
Termination of Transit Clause
Claim Co-operation Clause
accuMulation clause
An accumulation of interest beyond the limits expressed in the contract
By reason of any interruption of transit / temporary storage coverage prior to transit &/or any occurrence beyond the control of the Assured or
By reason of any casualty &/or at a transshipping point &/or in a connecting vessel or conveyance,
Then, the Underwriters shall be liable for the full amount at risk, but in no event shall they will be liable for more than twice the Contract Limit
general averageWhere extraordinary sacrifices are made or expenses incurred at the time of peril for the benefit of the of common safety of the whole maritime adventure
Intentional or Voluntary and not inevitable
Adventure must be imperiled, sacrifice in anticipation not recognized
Objective must be the preservation of adventure
The most common types of Casualties giving rise to General Average &/or Salvage Services are:
a) Jettison of Cargo
b) Sacrifice of the Vessel’s Equipment & Stores
c) Damage to Ship &/or Cargo during operations to extinguish a Fire on board a ship
Procedure to follow in ga casualty
Consignee will have to sign an Average Bond which is basic contract between cargo owner and ship owner whereby the cargo owner agrees to pay GA contribution properly adjusted
GA Guarantee – different from GA Bond and guarantees the payment of GA contributions. The guarantee amount is determined by Average adjuster based on the estimate of GA. This will be expressed as a % of CIF value of cargo
GA Security Guarantee
Average Adjuster determine which interest (Cargo/ship) will contribute to what extent in case of GA
Adjuster will be responsible for collecting security and performing the adjustment
Shipowners have a possessory lien over the cargo for GA
Declaration of General Average
Master of ship will usually be the first to be aware of a casualty giving rise to potential GA and will make
declarationShipowner will appoint Average Adjuster
underwriting considerations
Underwriting Considerations
Turnover
Vessel Selection
Description of Goods
Voyage Details
Any other relevant
information
Per Bottom
Limit/Per Location
Limit
Claim Experience
frequently asked questions
1. We always imports goods on CIF basis. Do we still require some form of marine cargo insurance?
2. Are Storage risks covered under a standard marine policy?
3. Are the 60 days mentioned in the duration clause of ICC A , B and C automatically available?
4. Are theft, pilferage and non – delivery (TPND) covered?
5. What is warranty and how does a breach of warranty impact claim?
claiMs docuMentationShipping Documentation Required:-
1. Original Bill of Lading
2. Charter Party Agreement
3. Shipping Invoice & Sales Contract including specification evidencing terms of sale & thereby title of ownership & insurable interest
4. If purchased & then sold, copy of purchase invoice evidencing the terms of purchase & change of ownership
5. Copy of claim on ship-owners &/or charterers &/or Third Parties
6. Insurance Certificate or Insurance Declaration
7. Statement of Claim
8. Load Port & Discharge Port Quality & Quantity Survey, which should contain the following:- Independent Load Port Survey Independent Discharge Port Survey
guidance notes
In Case of Shortage:-
Assured should immediately notify their Insurer as soon as they become aware of a Loss
Checks should be made that vessel has discharged all liquid cargo & had performed discharge operations satisfactorily. If not protest should be lodged
If possible Assured to obtain Letter of Guarantee from Ship-owner or their P&I Club covering the shortage & assist in protecting recovery rights against ship-owners
guidance notes
In Case of Contamination
Assured should immediately notify their Insurers so that Surveyor can be appointed. If need be even a hydrocarbon analyst
All Samples to be kept for an Indefinite Period & action to be taken against ship-owners / P&I Clubs to obtain guarantees
Source of Contamination should be found out as quickly as possible & immediate action should be taken
Suppliers should also be informed & invited to attend any re-testing in case contamination or specification failure is due to a pre-shipment condition. In such circumstances, any claim would then normally be for the account of Suppliers rather than Insurers