Marine insurance policies

Insurers will cover consignments under all risk policies which will allow compensation in the event of war, strikes, civil disturbances, etc. These policies are in the form of valued policies and are based on the stated value of the invoice, plus insurance, freight, and an extra percentage of 10%, 20%, or 30%, etc. profit margin for the consignment.

There are, however, unvalued policies, when the value of the goods have not been agreed in advance and are assessed at the time of loss. This means the consignor will, if his goods are damaged or destroyed, get the market price as compensation. The owner of the bill of lading has the right to claims of compensation.

All consignments can be covered against all risks in the form of a valued or unvalued policy. These policies will fall under five main headings:

1. Time policy, which insures goods or the vessel for twelve months, e.g. 1 May 1993 to 30 April 1994.

2. Voyage policy, which covers the cargo on a voyage from, say, London to Kobe.

3. Mixed policy, which covers a voyage from A to В and then for a further period of time. This may be used when a ship is going from, say, Southampton to Bermuda, then doing a series of trips from Bermuda to ports along the North American coast.

4. Floating policy, which gives cover for a particular amount, say, £500,000 so that it will not be necessary to continually write a new policy for each cargo that the ship carries. As the cover nears its end, the insurance company advises their client, and the premium is paid to renew the policy.

5. Open cover agreements, which are made between the underwriter and shipper, with the latter informing the underwriter, on a declaration form, whenever the shipment is made, and receiving the policy or certificate after shipment. Forwarding agents often have this kind of agreement with insurance companies, allowing them to make shipments, then inform the insurance company in arrears, i.e. after the shipment has been made. But the arrangement might only cover certain areas, e.g. North African ports, and consequently they would have to make special arrangements if a shipment was outside the agreed area.

12.4.3

Claims

As we have seen, all risk policies generally cover against every eventuality. However, clauses should be studied carefully. If a policy is free from particular average, in the case of deliberate damage, i.e. damage caused to save the rest of the cargo, as in, say, the case of a fire in a ship, only total loss will be paid by the insurance company, and part loss in the case of major disasters, e.g. fire or collision. If the policy has a with particular average clause, then partial loss will be compensated. Therefore, a policy with a WPA clause will cost more.

As in the case of large claims in non-marine insurance average adjusters, i.e. assessors, are called in to examine damage and estimate compensation. In a c.i.f. transaction, the exporters transfer their right to compensation, as the importer holds the bill of lading. In f.o.b. and c. & f. transactions importers hold the insurance policy as they arrange their own insurance.

12.5

Specimen letters

12.5.1

Date: 2016-01-03; view: 831