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Understanding Ocean Marine Cargo Insurance: Part I

Dive into the basics of marine insurance history, definition, types of coverage, and how policies are purchased with Trade Risk Guaranty Broker Services LLC.

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Understanding Ocean Marine Cargo Insurance: Part I

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  1. Welcome Trade Risk Guaranty Ocean Marine Cargo Insurance: Part I Trade Risk Guaranty Broker Services LLC

  2. Topics Covered Today Marine Insurance Basics History Definition Types of Coverage Ways Policies are Purchased Warranties Definition Common Warranties Enhancement Clauses Definition Standard Enhancements Trade Risk Guaranty Broker Services LLC

  3. The History of Cargo Insurance Dates Back To The 14thcentury • Dates back to the early Greek and Roman cultures • Developed in Italy and northern Europe • First Marine Insurance Market formed in the late 1680’s in England • Lloyd’s of London Trade Risk Guaranty Broker Services LLC

  4. Ocean Marine Cargo Insurance Definition An arrangement by which a company provides a guarantee of compensation (indemnity) for the specified loss or damage to the insured interest during the insured transit and against the insuring conditions in return for payment of premium Layman’s Terms: If cargo is lost or damaged during transit, it will be paid for. Trade Risk Guaranty Broker Services LLC

  5. Types of Coverage Named Perils Institute Cargo Clause B & C • Restrictive types of coverage • Coverage includes sinking, fire, stranding, heavy weather, and collision All Risk Institute Cargo Clause A • Most comprehensive • Covers all, except excluded losses • Exclusions written into policy Trade Risk Guaranty Broker Services LLC

  6. Types of Policies Open Policy • Rated • Based on actual value of goods shipped • Rate decreases as value of goods increases Flat Annual • Typically for low-volume importers • Rate based on an estimate of goods imported Trade Risk Guaranty Broker Services LLC

  7. How Cargo Insurance is Purchased CIF: Cost, Insurance, and Freight • Cost of insurance is figured into purchasing price • Ownership of goods starts at the foreign port Shipment by Shipment • Optimal for companies with few shipments • Provided by Freight Forwarders Annual • Costs only occur once a year • Lower premiums, better coverage, less paperwork Self-Insurance • Internal fund to cover losses Trade Risk Guaranty Broker Services LLC

  8. How Cargo Insurance is Purchased Ownership of goods starts at foreign port Seller only required to provide minimum coverage • Figured into selling price Generally acquired from inferior foreign agencies • Loss/Claims processes issues CIF – Cost, Insurance, and Freight Trade Risk Guaranty Broker Services LLC

  9. How Cargo Insurance is Purchased Optimal for companies with few shipments Typically provided by Freight Forwarders via their open policy • FF often marks up cost for this type of coverage Insurance through Freight Forwarder can be inferior • Always know your coverage, don’t wait until it’s too late to find out you’re not covered for a loss! Obtained for one shipment at a time Trade Risk Guaranty Broker Services LLC

  10. How Cargo Insurance is Purchased Costs only occur once a year Lower premiums and less paperwork More comprehensive coverage, typically All TRG policies are annual Annual Coverage Trade Risk Guaranty Broker Services LLC

  11. How Cargo Insurance is Purchased – Self-Insurance Internal insurance fund to cover losses/damages • Generally this means they have no insurance and are willing to “eat” any losses acquired How would the loss of an entire shipment of goods affect your business? Trade Risk Guaranty Broker Services LLC

  12. What is a Carrier’s Liability? Ocean Carrier - $500 per package or freight unit • An entire shipping container can be considered a package International Air Carrier - $9.07 per pound or $20 per kilo Domestic Air Carrier - $0.50 per pound Carriers are liable for… Trade Risk Guaranty Broker Services LLC

  13. THE END Now you know a bit more about the specifics of Ocean Marine Cargo Insurance Take this knowledge and apply it to your own importing practices Feel free to reach out and ask any lingering questions Thanks for watching! Trade Risk Guaranty Broker Services LLC

  14. Meet the team Nick Esposito Our creative minds Meredith Lambert Marketing Executive Marketing Executive Trade Risk Guaranty Broker Services LLC

  15. Send us a message Our contact information E-mail You can contact us at marketing@traderiskguaranty.com or Nick & Meredith directly at nick.esposito@traderiskguaranty.com meredith.lambert@traderiskguaranty.com Our address 211 East Main Street Suite C Bozeman, MT 59715 On the web twitter.com/trg_bond facebook.com/trg_bond linkedin.com/trg_bond traderiskguaranty.com Trade Risk Guaranty Broker Services LLC

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