Chapter 12 Insurance

1. Chapter 12Insurance By: Grace Xia xiahuiweihai@yahoo.com

2. Part I Introduction I. Cargo transport insurance is to protect the interests of importers and exporters from possible financial losses caused by risks during the transit of the goods from the factory or warehouse in a country of origin to the warehouse in a country of destination.

3. II. The parties involved in an insurance • the insurer: the party who insures others against possible losses or damage and undertakes to make payment in case of loss. • the insured: the party who is insured against possible losses and to whom payment covering the loss will be made. • the insurance applicant: the party who effect insurance on behalf of the insured.

4. the insurance policy: the contract made between the insurer and the insured. • the insured amount: the amount of money the insurer agrees to cover by insurance against the subject matter is ( which is usually the amount of 110% of CIF value of the consignment in marine cargo transport insurance). • the insurance premium: the sum of money the insured agrees to pay the insurer for an insurance policy is called.

5. II. Two major insurance clauses Institute Cargo Clause (伦敦协会货物保险条款)(Lloyd’s) China Insurance Clauses (中国保险条款) II. C.I.C. has become effective since 1982. Its Ocean transport cargo insurance covers: FPA (Free From Particular Average) (平安险) I) 3 basic WPA/ WA (With Particular Average) (水渍险) risks AR (All Risks) (一切险) ＊Commencement and termination of cover are: warehouse to warehouse (W/ W).

6. II) 11 general additional risks: a. Theft Pilferage and Nondelivery—— TPND (偷盗提货不着险) b. Fresh Water Rain Damage —— FWRD (淡水雨淋险) c. Risk of Shortage (短量险) d. Risk of Intermixture and Contamination (混杂、玷污险) e. Risk of Leakage (渗漏险) f. Risk of Clash and Breakage (碰损、破碎险) g. Risk of Odour (串味险) h. Damage Caused by Sweating and/or Heating (受热受潮险) i. Hook Damage (钩损险)

7. j. Loss and/or Damage Caused by Breakage of Packing (包装破损险) k. Risk of Rust (锈损险) III) 8 special additional risks a. War Risk (战争险) Its commencement and termination of cover are limited to water borne. b. Strikes Risk (罢工险) Its commencement and termination of cover are warehouse to warehouse.

8. c. Failure to Deliver Risk (交货不到险) d. Import Duty Risk (进口关税险) e. Rejection Risk (拒收险) f. On Deck Risk (舱面险) g. Aflatoxin risk (黄曲霉素险) h. Fire Risk Extension Clause for Storage of Cargo at Destination Hong Kong, Including Kowloon, or Macao —— FREC (货物出口到香港（包括九龙）或澳门存仓火险责任扩展 条款)

9. III. C.I.C. other insurance: I) Overland transportation cargo insurance covers: overland transportation risks (陆运险, similar to basic WPA) risks overland transportation all risks (陆运一切险, similar to All Risks） overland transportation insurance frozen special products risks (陆上运输冷藏货物险） risks overland transportation cargo war risks “by Train” ( 陆上运输货物战争险（火车）)

10. II) Air transportation cargo insurance air transportation risks (航空运输险，similar to basic WPA) risks air transportation all risks (航空运输一切险，similar to All Risks) Additional risks: air transportation cargo war risks (航空运输货物战争险)

11. III) Parcel post insurance parcel post risks (邮包险) basic risks parcel post all risks (邮包一切险) additional risks: parcel post war risks (邮包战争险)

12. IV. ICC covers 6 risks: ICC (A): similar to all risks of C.I.C. Basic ICC (B): similar to WPA of C.I.C. risks ICC (C): similar to FPA of C.I.C. Institute War Clause—Cargo Additional (协会战争险条款（货物）) Risks Institute Strike Clause---Cargo (协会罢工险条款（货物）) Malicious Damage Clause (恶意损害险条款) Its commencement and termination of cover are warehouse to warehouse.

13. Part II Marine Insurance Coverage I. The risks covered by the insurer I) Perils of the sea （海上风险） a. Natural Calamities （自然灾害） It refers to the perils under force majeure(不可抗力) such as heavy weather, thunder storm and lightening, tsunami, earthquake, flood, volcanic eruption, etc. (The ordinary action of the winds and waves is not taken as natural calamities.)

14. b. Fortuitous Accidents （意外事故） e.g. grounded, strand, sunk, shipwreck, collision, missing. II) Extraneous risks （外来风险） a. general extraneous risks （一般外来风险） 11 general additional risks b. special extraneous risks （特殊外来风险） 8 special additional risks

15. II. Average （海损） total actual total loss （实际全损）—— physical loss loss construction total loss （推定全损） —— commercial loss, namely the expenses for salvaging, repairing and transportation are beyond the remaining value. partial general average （共同海损） loss G.A. Contribution（共同海损分摊） particular average （单独海损）

16. ＊Actual Total Loss: means the whole lot of the consignment has been lost or damaged or found valueless upon arrival at the port of destination. ＊General Average: is in use when • both the ship and the consignments on board are endangered; • and the captain intentionally and reasonably does some sacrifices or makes some expenses; • for the safety of the ship and the consignments on board.

17. ＊General Average Contribution: The loss, the sacrifice done for that purpose, is to be borne by both the carrier and the consignors in proportion to the value of their interest thus saved. ＊Particular Average: means that a particular consignment is partially damaged.

18. III. Charges （费用） a. Sue and labor charges （施救费用）: are made by the insured or his agent to prevent them from suffering further losses. b. Salvage charges （救助费用）: are made to those other than the insured, the carrier and the insurer who come to the salvage of the ship and the consignment. The principle: “No cure, no pay.” c. Special charges （特别费用） d. extra charges （额外费用）

19. Part III. 3 Basic Risks of C.I.C. I. FPA Sometimes because of the nature of a product or because of the shipping conditions, only limited coverage can be obtained. FPA, Free from Particular Average, is a limited coverage that usually applies to used merchandise, waste materials, and goods shipped subject to an on-deck bill of lading. It covers partial and total losses due to specifically named perils like stranding, sinking, burning or collision of the vessel. While FPA is not a complete as "all-risks" coverage, it is better than having no insurance at all.

20. FPA covers the following losses: i. Actual total loss or constructive total loss of the consignment caused by natural calamities; ii. Total loss or partial loss caused by fortuitous accidents; iii. General average of the insured goods attributable to heavy weather, lightening, tsunami, where the ship has been stranded, sunk, or burned, inspective of whether the event took place after or before such accidents; iv. Partial or total loss consequent on failing of an entire package or packages into the sea during loading, unloading, and transshipment;

21. v. Reasonable expenses the insured makes for the salvage of the goods insured, and for averting or minimizing the losses, provided the expenses do not exceed the insured amount. vi. Expenses incurred by discharge of the insured cargoes at a port of distress following a sea peril as well as special charges arising from loading, warehousing at an intermediate port of call or refuge（避难港）; vii. Sacrifice in and contribution to general average and salvage charges. viii. Such proportion of losses sustained by the ship-owners as is to be reimbursed by the insured.

22. II. WPA Aside from the risks covered under the FPA condition as above, WPA also covers particular average of the insured goods caused by heavy weather, lightening, tsunami, earthquake and flood. III. All Risks Aside from the risks covered under the FPA and WA conditions as above, All Risks also covers all risks or damage done to the insured goods whether partial or total, arising from general extraneous risks during transit.

23. Part IV Insurance Practice I. Insurance documents insurance policy （保险单） insurance certificate （保险证明） open cover/ policy （预保单） endorsement policy （保险凭证更改批单）

24. II. Insurance principals I) Firstly insure a basic risk. e.g. wood, coal, steel plate choose FPA; plywood chooses WA; machinery, bike, wooden toys, textiles, sports shoes choose A.R. II) Secondly choose to insure general additional risks according to the characteristics of the insured goods. III) Thirdly choose to insure special additional risks according to political situation, laws and regulations of trading country etc.

25. III. Insurance amount and premium I) Insurance amount It is the actual insured amount of the insured objects. It is the basis to calculate the insurance premium. Usually, insurance CIF/CIP (1+10%) premium price expenses incurred and expecting profit II) Insurance premium Insurance premium= insurance amount X premium rate

26. Part V Formula Expression 1.我们的保险总额为发票金额的110%， 仅至目的港为止。

27. Part V Formula Expression 1.我们的保险总额为发票金额的110%， 仅至目的港为止。 C: OURINS ONLYCVR FOR110PCT INVVALUE UPTO PORTDEST 2. 请注意本保险只承保FPA和战争险，如果要求附加险，引起的额外保险费应由买方承担。

28. Part V Formula Expression 1.我们的保险总额为发票金额的110%， 仅至目的港为止。 C: OURINS ONLYCVR FOR110PCT INVVALUE UPTO PORTDEST 2. 请注意本保险只承保FPA和战争险，如果要求附加险，引起的额外保险费应由买方承担。 C: OURINS ONLYCVR FPA WARRISK IFRQRD ADDTNL INSCVR EXTRAPRM WUDBE FORBYRS ACCT

29. 3. 投保的保险只包括水渍险、偷盗提货不到险、仓对仓条款及 战争险，保险金额为发票金额为110%。如果要求的险别和 总值超过这一限度，任何额外费用将由买方承担，并体现于 相应的信用证中。

30. 3. 投保的保险只包括水渍险、偷盗提货不到险、仓对仓条款及 战争险，保险金额为发票金额为110%。如果要求的险别和 总值超过这一限度，任何额外费用将由买方承担，并体现于 相应的信用证中。 C: INS ONLYCVR WPA TPNDW/W WARRISK FOR110PCT CIFINVVALUE IFMORE RISKS/AMT ADDTNLPRM SHLBE FORBYRACCT EMBODID INRLTVL/C ACDGLY

31. 4. 我们希望提起你方注意保险问题，本保险只承保WPA, 包括 仓对仓条款，以及战争险和罢工险。如果要求其他条款，请在交易达成前通知我方，以便对保险费用作相应的调整并毫不延迟的交货。

32. 4. 我们希望提起你方注意保险问题，本保险只承保WPA, 包括 仓对仓条款，以及战争险和罢工险。如果要求其他条款，请在交易达成前通知我方，以便对保险费用作相应的调整并毫不延迟的交货。 C: ATTN INSONLYCVR WPA INCLDGW/W WARRISK INCLDGSRCC IFOTHRTERM RQRD PLSADV B4CONCLSN IOTADJ CHRGS ACDGLY N SHPGDS W/ODLAY

33. 5. 由于我方所报价格以CFRC3% 为基础，不言而喻，保险必须由你方自己投保，但是我们将乐意应你方要求，以你方承担费用而投保。在此情况下，必须尽早通知我方有关保险的 价值和投保险别。

34. 5. 由于我方所报价格以CFRC3% 为基础，不言而喻，保险必须由你方自己投保，但是我们将乐意应你方要求，以你方承担费用而投保。在此情况下，必须尽早通知我方有关保险的 价值和投保险别。 C: INSSHLBE EFCTD BYYREND IVO PRCSQTEDON CFRC3PCT BUTVCANDO FORYRACCT SUBJTO ADVG INSVALUE N RISKCVR ASAP

35. 6. 我们特此通知你方，合同5010号项下的1000台电视机，已由“和平号”轮发运，该轮将于5月1日启航。鉴于此货以CFR条款出售，你方应立即办理保险。

36. 6. 我们特此通知你方，合同5010号项下的1000台电视机，已由“和平号”轮发运，该轮将于5月1日启航。鉴于此货以CFR条款出售，你方应立即办理保险。 C: S/C5010 1000TVSETS SHPDONS/S PEACE SLGMAY1 ASSOLDON CFR YSHLINS IMM

37. 7. 我们把保险事宜交由你方安排，但希望货物投保一切险，保险费向收货人索取。

38. 7. 我们把保险事宜交由你方安排，但希望货物投保一切险，保险费向收货人索取。 C: PLSARNGE GDSINS FORUS HPAGNST ALLRISKS CHRGS FORCNEE ACCT

39. 8. 请务必做到上述货物应于5月15日之前发运，并按发票金额的150%投保一切险。我们知道，根据你方惯例，你方仅承保高出发票金额10%的金额，所以额外的保费将由我方承担。

40. 8. 请务必做到上述货物应于5月15日之前发运，并按发票金额的150%投保一切险。我们知道，根据你方惯例，你方仅承保高出发票金额10%的金额，所以额外的保费将由我方承担。 C: ABVGDS SHLBESHPD BFR15MAY CVR ALLRISKS FOR150PCT INVVALUE BUT YRUSU PRACTICE 110PCT SOEXTRAPRM WLBEFOR OURACCT