国际贸易实务

第

7

章Chapter 7

Chapter 7 Cargo Transport Insurance

Objectives

Focus

Content of Cargo Transport Insurance

Risks and Losses

Difficult points

国际贸易实务

第

7

章

China Insurance Clause, C.I.C

Export & Import Insurance Practice

Perils of the Sea and Cargo Transport Insurance Coverage

the concept of cargo transport insurance risks and losses in marine cargo transport the basic risks coverage and additional risks coverage the notion of overland, air and postal transport insurance the insurance practice in international trade

7.1 Fundamental Principles of Cargo Insurance

7.2 Risks and Losses in Cargo Transport

7.3 Ocean Marine Insurance under C.I.C

7.4 Insurance of Land, Air and Parcel Post Transport

7.5 Insurance Practice of International Trade

Chapter Chapter SevenSeven

Human beings are subject to various unpredictable risks — risk of death or disability due to natural or accidental causes, risk of loss of or damage to one’s property, etc. Risk has the element of unpredictability, but losses can be mitigated through insurance. There are many types of insurance products available for life and non-life —property insurance, life insurance, liability insurance, bond insurance, to name just a few. Cargo insurance belongs to property insurance. Cargo insurance covers physical damage to or loss of your goods whilst in transit by land, sea and air and offers considerable opportunities and cost advantages if managed properly. It brings the potential loss of or damage to goods into cost and the insurer, on the basis of a premium received, undertakes to indemnify the insured against loss from certain risks or perils to which the cargo insured may be exposed. Cargo insurance has become a must in international trade. Without it, international trade can not be guaranteed.

OverviewOverview

7.1 Fundamental Principles of Cargo Insurance

Three main principles of insurance, two subsidiary principles and a doctrine: A basic understanding of the underlying principles of cargo insurance will facilitate the process of claims.

1. Principle of Insurable Interest( 保险利益原则 )2. Principle of Utmost Good Faith ( 最大诚信原则 )3. Principle of Indemnity( 补偿原则 ) Two Subsidiary Principles Under the indemnity principle, there are two sub-principles: 1) Contribution( 分摊 ) 2) Subrogation( 代位追偿 )4. The Doctrine of Proximate Cause ( 近因原则 )

Scope of Coverage

Risks Losses Expenses

Perils of the seaExtraneous

risks

Natural calamity

Fortuitous accidents

General extraneous risks

Special extraneous risks

Total loss Partial Loss

Actual total loss

Constructive total loss

General average

Particular average

Sue and labor expenses

Salvage charges

7.2 Risks and Losses in Cargo Transport

In marine cargo transport insurance, risks fall into:

1. Perils of the Sea 海上风险

1) Natural Calamity 自然灾害 ( the perils under force majeure such as vile weather, thunder storm and lightening, earthquake, flood, etc.)

2) Fortuitous Accidents 意外事故 ( risks such as ship stranding, striking upon the rocks, ship sinking, ship collision, fire, explosion, etc.)

2. Extraneous Risks 外来风险

1) General Extraneous Risks 一般外来风险 ( risks caused by theft, rain, leakage, shortage, dampness, heating, hooking, rusting, etc.)

2) Special Extraneous Risks 特殊外来风险 ( risks caused by on deck, war, strikes, failure of delivery and rejection, etc.)

7.2.1 Risks in Marine Cargo Transport

7.2.2 Losses in Marine Cargo TransportThe losses and damages done to the goods can fall into : 1. Total Loss 全部损失 1) Actual Total Loss 实际全损 （ the whole lot of the consignment h

as been lost or damaged or found valueless upon the arrival at the port of destination)

2) Constructive Total Loss 推定全损 ( the actual loss of the insured goods is unavoidable, or the ship or the consignment has to be abandoned because the cost of salvage or recovery would exceed the value of the ship and the consignment in sound condition upon the arrival of the port of destination.)

2. Partial Loss 部分损失 1) General Average (G.A.) 共同海损 ( when both the ship and the co

nsignments on board are engaged and the captain, for the safety of the ship and the consignments, intentionally and reasonably does some sacrifices or makes some expenses.)

2) Particular Average (P.A) 单独海损 ( a particular consignment is partially damaged)

The condition for forming G.A.

1. The safety of the ship and the cargo is threatened; 2. The measures taken are conscious and reasonable; 3.The sacrifice is particular and expenses are extra; 4. The sacrifice and expenses must be effective in the end

7.2.3 Expenses

Expenses here fall into the following kinds:

1. Sue and labor expenses 施救费用 ( made by the insured or his agent to prevent them from suffering further losses)

2. Salvage charges 救助费用 ( made to those other than the insured, the carrier and the insurer who come to the salvage of the ship and the consignments.

7.3 Ocean Marine Insurance under C.I.C

The China Insurance Clauses (C.I.C) issued by People’s Insurance Company of China (PICC) provides both basic risks coverage and additional risks coverage for marine cargo transport. The former can be further divided into three conditions: Free From Particular Average (F.P.A), With Particular Average (W.P.A.) and All Risks （ A.R. ） and the latter includes general additional risks and special additional risks.

China State Insurance Organization

In China, China Insurance Clauses(C.I.C. ） issued by the

People’s Insurance of China(PICC) is mainly adopted for international cargo transportation insurance.

Basic Risks Coverage

Additional Risks Coverage

All Risks(AR)All Risks(AR)

Free from Particular Average (FPA)Free from Particular Average (FPA)

With Particular Average(WPA/WA)With Particular Average(WPA/WA)

General Additional Risks

Special Additional Risks

Ocean Transport Insurance Clauses

Basic Risks Coverage

基本险

FPA平安险

WPA水渍险

AR一切险

Total LossPartial Loss

FPAPartial Loss

WPATotal LossPartial Loss

Ocean Marine Cargo Clause modified on 1 January 1981 provides:

All Risks = F.P.A. + W.A. + General Additional Risks Scope of insurance responsibilities: AR Scope of insurance responsibilities: AR >> WPA WPA >> FPA FPA

Additional Risks Coverage for Ocean Transport under C.I.C

1) General Additional Risks 2) Special Additional Risks

附加险

Ad

dition

al Risks

General Additional Risks

一般附加险

Special Additional Risks 特殊附加险

Fall into 8 types, such as war risks and strike risks.

Fall into 11 types covered in

All Risks

Ocean Marine Cargo Clause modified on 1 January 1981 provides:

General additional risks cover losses caused by extraneous risks and can be classified into following types:

1. Theft Pilferage and Non-Delivery , T. P. N. D. 偷窃、提货不到险；2. Rain Fresh Water Damage , F.W. R. D. 淡水雨淋险；3. Risk of Shortage 短量险；4. Risk of Intermixture and Contamination 混杂、玷污险；5. Risk of Leakage 渗漏险；6. Risk of Clash and Breakage 碰损、破碎险；7. Risk of Ordour 串味险；8. Damage Caused by sweating and Heating 受潮受热险；9. Hook Damage 钩损险；10. Loss and Damage Caused by Breakage of Packing 包装破裂险；11. Risk of Rust 锈损险 .

General Additional Risk

Special additional risks cover losses caused by special extraneous risks. Normally they are classified into following types:

1. War Risks 战争险 ;

2. Strike risks 罢工险 ;

3. Aflatoxin 黄曲霉素险 ;

4. Failure to deliver 交货不到险 ;

5. On Deck 舱面险 ;

6. Import Duty 进口关税险 ;

7. Rejection 拒收险 ;

8. Fire Risk Extension Clause , F. R. E. C. —— for storage of cargo at destination

HongKong , including Kowloon , or Macao 货物出口到香港（包括九龙）或澳门 存仓火险责任扩展条款（ ）。

Special Additional Risks

Exclusions ( 除外责任 )refer to losses and expenses for which the insurance company declares clearly not to be responsible. They usually include:

1) Loss or damage caused by the intentional act or fault of the insured;2) Loss or damage falling under the liability of the consignor;3) Loss or damage arising from the inferior quality or shortage of the insured goods prior to the attachment of this insurance;4) Loss or damage arising from normal loss, inherent vice or nature of the insured goods, loss of market and/or delay in transit and any expenses arising therefrom;5) Risks and liabilities covered and excluded by the war risks clause and strikes, riot and civil commotion clauses under C.I.C.

Exclusions

Commencement and Termination of Basic Insurance

The commencement and termination of basic insurance are usually stipulated by adopting the customary Warehouse to Warehouse Clause, W/W.

By the W/W clause, the liability of the insurer is extended to cover pre-shipment and post-shipment risk. The insured goods are covered from the time when they leave the warehouse at the place named in the policy for the commencement of the transit and continue to be covered until they are delivered to the final warehouse at the destination named in the policy, but the policy provides an overriding time limit of 60 days after the completion of discharge of the insured goods from the seagoing vessel at the final fort of discharge. On the expiration of that time limit of 60 days the cover ceases to protect the goods even though they have not reached the final warehouse.

7.4 Insurance of Land, Air and Parcel Post Transport

Overland Transport Cargo Insurance

Overland Transport Insurance & Overland Transport All Risks

Overland Transport Cargo War Risks

Air Transport Insurance

Parcel Post Insurance

Parcel Post Risks & Parcel Post All Risks

Parcel Post War Risks

Air Transport Insurance & Air Transport All Risks

Air Transport Cargo War Risks

Under CIC, PICC sets overland, air transport and parcel post insurance respectively according to various means of transport.

7.5 Insurance Practice of International Trade

In the case of a CIF contract, the exporter will effect insurance immediately after receiving the letter of credit from the buyer. For insurance, he will prepare necessary documents and fill in an Application for Insurance. Insurance shall be effected before shipment is made or before the consignment is delivered to the carrier. In the case of an FOB or CFR contract, the buyer will effect insurance and open policy would be preferred to avoid failure of insurance. Attention is paid to the following points in effecting insurance: 1. Whether the insurance coverage is under C. I.C. or I. C. C(Institute Cargo Clauses, 伦敦保险协会 Institute of London Underwriters 制定的海运货物保 险条款） . 2. What type of coverage is required, for example, F. P.A. or W. P. A. 3. Whether the insured amount is 110% of the invoice amount or more than that. 4. Whether insurance is in effect before the date of shipment, 5. The currency of the insurance shall be the same as the invoice currency to avoid foreign exchange exposure.

1) Who is going to arrange the insurance under the following price terms CIF, FOB and CFR?

2) Choose the Insurance Coverage

The following factors should be taken into account for adopting insurance coverage :

1) The characteristics of the cargo;

2) The packing of the cargo;

3) The mode of transport;

4) The line and port of transport;

5) The season of transport;

6) Possible losses and damages in transit.

What insurance cover would you choose for the following products?

1) shoes 2) Logs of wood. 3) Wooden toys.

4) Heavy machinery 5) Plywood 6) Bicycles

Probably, you will give the following answers (1), (3), (4) and (6) would probably be insured against All Risks because they are prone to be damaged in transit. Most manufactured goods fall into this category. (2) would be insured against F.P.A., for while it could be lost it is not likely to be damaged. (5) on the other hand would be insured against W.P.A. because it could be damaged in transit, but is less prone to be damaged than the finished products mentioned.

3) Insured Amount and Insurance Premium The insured amount the highest compensation amount undertaken by the insurer the foundation for calculating the insurance premium. usually calculated on the basis of the CIF invoice value plus 10%

or 15 % representing an anticipated profit for the buyer.

The formula for calculating the insured amount under CIF trade terms:

Insured Amount = CIF price x ( 1 + markup percentage )

The insurance premium the amount of money paid by the insured in order to make the

insurance contract come into force

the basic proceeds cared by the insurer

usually calculated according to two kinds of rates: the general premium rate and the named cargo premium rate.

The formula for calculating the premium under CIF trade terms:

Insurance Premium = insured amount x premium rate = CIF price x ( 1+ markup percentage ) x premium rate

保险费 = CIF 价 x （ 1 + 投保加成率） × 保险费率

例如，某 CIF 合同价值为USD12000 ，投保一切险与战争险，费率分别为 0.6% 和 0.4% ，请问保险金额 和保险费各多少？

Answer: Insured Amount:

USD12000 x 110% = USD13200Insurance Premium:

USD 13200 x (0.6%+0.4%) = USD132

关于投保加成

国外买方一般要将预期利润和有关费用加入货价内一并进行投保，以防货物万一遭损后，可从保险公司得到应有的赔偿。这种在货价之外的金额即为加成。一般按 CIF 价值加一成 ( 即 10 ％ ) 。也可根据具体情况加二成或三成。不过如按二成三成加保，其保费的差额部分应由买方负担，如国外要求超过三成时，应征求保险公司意见。在签订贸易合同时不能贸然接受。

Insurance Documents

Insurance

Certificate

保险凭证

Open Policy 预约保险单

Insurance

Policy

保险单

4) Insurance Documents

Combined Certificate

联合凭证

Endorsement批单

4) Insurance Documents the evidence documents on the strength of which the insurance contract is sign

ed by and between the insurer and the insured. Commonly used insurance documents in international trade: (1) Insurance policy: the mostly used insurance document. (2) Insurance certificate: a simplified insurance document. The certificate carries the

same contents as the insurance policy except for the obligations and rights of the insurer and the insured.

(3) Combined certificate: the combination of the invoice and insurance policy, much simpler than the insurance certificate. It is not often used now.

(4) Open policy: also known as open cover, the general contract between the insured (normally the importer) and the insurer, often used in import transactions in China.

(5) Endorsement: After the insurance policy is issued, if the insured wants to add or change some items of the policy, the insured can, with the insurance company’s consent, apply for the addition and change. The document issued to state the additional items or changes is known as endorsement, which is considered an indispensable part to the policy.

The insurance clause in a S/C should specify the insured amount, and the risks to be covered by the insurer.

1) In the contracts under FOB,CFR, FCA and CPT trade terms, the buyer is to arrange insurance and pay premium. In the contract regarding insurance ， it can only stipulates:

“ To be effected by the buyers”.

7.5.4 I Insurance Clause of the Contract

2) In the CIF or CIP contract, the insurance clause can stipulate ：

Insurance to be covered by the sellers for 110% of the total invoice value against all risks and war risks, as per Ocean Marine Cargo Clauses and Ocean Marine Cargo War Risks Clauses of the People’s Insurance Company of China, dated 1/1 1981.….

More examplesInsurance shall be effected for the amount of the seller’s CIF invoice value plus 10% against W. P.A. Any additional insurance required by the buyer shall be at his own expense. The seller may insure against War Risk at the buyer’s request and at his expense. In case the rate of relevant insurable premium shall be raised between the time of concluding contract and that of shipment, this excess premium shall be on the buyer’s account.

Marine insurance to be effected by the seller against W.P.A. for CIF invoice amount plus ten percent only, any additional insurance required by the buyer shall be effected by him and at his own expense.

The insurance should be effected by the buyer if the contract is concluded on FOB or CFR basis. However, the seller should, immediately after the goods are completely loaded at port of shipment, fax to notify the buyer of the consignee of the contract number, name of the commodity, quantity, gross weight, measurement, invoice value and number of B/L, name of the vessel, the date of shipment, etc. In case the goods are not insured in time, owing to the seller’s failure to give shipping advice timely, any and all consequent losses should be borne by the seller.

7.5.4 Insurance Claim Settlement for Damages to Exported Goods

If the exported goods are damaged or lost during transit, the consignee or his agent should settle claims against the Survey and Claim Settlement Agent of the insurer at the place of destination. The Survey and Claim Settlement Agent will come to examine the damages and losses of the consignment and pay indemnity to the consignee.

In conducting claim settlement with the insurer, the insured should do the following:

1. Inform the damage or loss2. Make a claim against the parties concerned 3. Take necessary or reasonable measures 4. Prepare the following documents for the claim insurance policy or the like; bill of lading, airway bill, or the like; invoice; packing list and weight memo; cargo damage or loss report; cargo survey report; sea protest; statement of the claim; document testifying the claim against the third party.

Follow-up Practice

1. Review and Discussion Questions.1) Why is insurance indispensable to international trade?

2) What are the fundamental principles of insurance?

3) What are the major types of risks in marine cargo transport?

4) What is constructive total loss and what is the difference between actual total loss and constructive total loss?

5) What’s the difference of General Average and Particular Average ？6) What are the major types of basic risks coverage and additional risks coverage?

7) Explain the scope of coverage of F.P.A. and W.P.A.?

8) What is W/W Clause?

9) What is the difference between the insurance policy and insurance certificate?

10) How to choose the right insurance coverage ？.

2 Choose the right answer from each of the following.

1 ） 1) ________is defined as loss arising in the consequence of extraordinary and intentional sacrifice made, or expenses incurred, for the common safety of the ship and cargo. A ． Particular average B ． General average C ． Without average D ． With average2 ） Which of the following risks is not covered by the All Risks coverage of marine cargo transport insurance._______. A. delay B. flood C. lightning D. heavy weather3 ） WPA is one of the ______. A. basic risks B. additional risks C. special additional risks D. general additional risks4 ） Which of the following risks is not covered by the AR coverage of marine cargo transport insurance? A. marine perils B. stranding C. pilferage D. inherent vice5) Which of the following risks are covered by the All Risks coverage of PICC Ocean Marine Cargo Clauses ？ A. war and fire B. strike and delay C. aflatoxin and on deck D. heavy weather and fire

6) As far as risks taken by the seller is concerned, A. CIF is bigger than CFR. B. CIF is as the same as CFR. C. CFR is bigger than CIF. D. FOB is bigger than CFR. 7) In insurance, the party who insures others against possible loss or damage and promises to effect payment in case of loss or damage is called the _______ A. insured B. consignee C. insurer D. consignor8) The All Risks of marine cargo transport insurance covers risks of__________. A. war and strike B. general average C. inherent vice of goods D. stranding of ship9) Under the trade term CFR, the _______ must contract for the cargo transport insurance. A. buyer B. seller C. consignee D. carrier10) General perils refer to natural ________and fortuitous accidents. A. calamities B. damages C. losses D. franchises 

3 Decide whether the following statements are true or false.

1) An insurance contract is essentially a contract between the insurer and the insured. ( )2) The amount of money the insurer agrees to cover by insurance against the subject matter is the ins

ured amount, which is normally 110% of CIF value of the consignment. ( ) 3) Under CIF term, the seller has to procure insurance against the buyer’s risk of loss of or damage to

the goods during the carriage. ( ) 4) FPA coverage includes total losses resulting from marine perils and other specific accidents, like an

earthquake. ( ) 5) Special additional coverage such as war risks, strikes and so on must be taken out together with F.P

.A. or W.A. ( ) 6) General average and salvage charges are covered both in FPA and WA coverage. ( ) 7) A.R. does not cover risks of war and special additional risks but cover the general additional risks. (

) 8) Three types of risks are covered by ocean marine insurance, namely the perils of the sea, the extran

eous risks and the force majeure. ( )9) If you have insured your goods against A.R., you will get compensated whatever risks occurs to yo

ur goods. ( )10) A.R. covers all losses and damages to the goods caused by perils of the sea, fortuitous accidents a

nd extraneous risks.

A cargo ship was sailing from the Shanghai port to Singapore, when suddenly a fire broke out in the ship’s hold and soon spread to the engine room. The captain, for the safety of the ship and the consignments on board, ordered his men to pour water into the hold and the fire was put out. But the engine was damaged, unable to sail. So the captain decided to hire a towboat to drag the ship to a nearby port for repair. The losses caused by this accident were: (1) 1 000 cartons of goods were burnt; (2) 600 cartons of goods were wet; (3) the main engine and some decks were damaged; (4) towing charges; (5) the extra cost of fuel and the wages of the crew. What types of losses do the losses in the above case belong to in terms of characteristics of losses?

 

Case Study1

A Chinese company exported 600 cases of tableware on CIF basis. The export company covered the insurance on the goods against FPA for 110% of the CIF value. Before the goods were loaded on the ship, 20 cases were off the hook and fell into the sea. Do you think the insurance company should undertake to compensate for the loss? If this transaction was concluded on FOB or CFR basis, should the insurance company compensate for the loss? Why or why not?

Case Study2

http://wwwWeb Links

1. http://www. picc.com.cn 中国人民保险公司网站2. http: // www.mofcom.gov.cn 中国商务部网站

Case Study （ Insurance ）

在 80 年代，有一进口商同国外买方达成一项交易，合同约定的价格条件为 CIF ，当时正值海湾地区爆发战争，装有出口货物的轮船在公海上航行时，被一发导弹误中而沉。由于在投保时，没有加保战争险，不能取得保险公司的赔偿。买方为此向卖方提出索赔，理由是，卖方明知海湾有战事公海上不平安，而没有投保战争险，致使买方利益受损。

Case Study （ Insurance ）

某出口公司以 CIF 条件向南美某国出口花生酥糖 1000 箱，投保一切险。由于货轮陈旧、航速太慢且沿线到处揽货，结果航行 3 个月才到达目的港。花生酥糖因受热时间过长而全部软化，难以销售。保险公司对此是否负责赔偿？

Case Study （ Insurance ）

我某公司按 CIF 条件向中东某国出口一批货物，根据合同投保了水渍险附加偷窃提货不着险。但在海运途中，因两伊战起船被扣押，而后进口商因提货不着便向我保险公司进行索赔，我保险公司认为不属于保险范围，不予赔偿，是否合理？

Case Study （ Insurance ）

我某纺织品公司向澳大利亚出口坯布 100包，我方按合同规定投保水渍险，货在海运中因舱内食用水管破裂，致使该批坯布中 30 包浸有水渍。但保险公司拒绝赔偿。

Case Study （ Insurance ） 我某出口公司按 CIF San Francisco 成交一批

出口货物，后国外来证要求提单上的“ Shipping Mark”栏加注“ San Francisco OCP New York”字样，我方在投保时为了单证一致，而且考虑到有利于使用内陆运优惠，认为可以照办而不必要求对方改证，在保险单上的有关项目也照此填写。问这样做是否妥当？

OCP (Overland Common Point)通过陆地可达点

Case Study （ Insurance ）

某出口公司按 CIF 条件成交货物一批向中国人民保险公司投保了“水渍险”，货物在转船过程中遇到大雨，货到目的港后，收货人发现有明显的雨水侵渍，损失达 70

% ，因而向我方提出索赔，我方能接受吗？

Case Study (B/L ）

某进口公司以 CFR 价格，即期信用证付款方式成交某商品 1500袋，提货时，发现短量 103袋，持清洁提单向船公司索赔时，船公司出示出口人出具的赔偿保证书（ Letter of Indemnity ， L/I ）（通称保函），拒不承担赔偿责任，进口商当即致电卖方索赔，巧遇卖方公司破产倒闭。对此，进口人该如何做？船公司真的没有责任吗？

有一货轮在航行中与流冰相撞。船身一侧裂口，舱内部分乙方货物遭浸泡。船长不得不将船就近驶入浅滩，进行排水，修补裂口。而后为了浮起又将部分甲方笨重的货物抛入海中。船体撞裂和部分货物遭受浸泡损失了三万美元，将船舶驶上浅滩以及产生的一连串损失共为八万美元，那末，如何分摊损失？

Case Study （ Insurance ）

Case Study

“明西奥”轮载着散装的亚麻籽，驶向美国的纽约港，不幸在南美飓

风的滂沛罗斯冷风区内搁浅而被迫抛锚。当时，船长发现船板有断

裂的危险，一旦船体裂缝漏水，亚麻籽受潮膨胀有可能把船板涨

裂。所以船长决定迅速脱浅，“明西奥”轮先后 4次动用主机，超负荷

全速开动后退，终于脱浅成功。抵达纽约港后，对船体进行全面的

检修，发现主机和舵机受到严重损坏。经过理算，要求货方承担

6451.16英镑的费用。货方对该项费用发生异议，拒绝付款。