ALFI Institute Modul 5 Cargo Insurance, New - Pak Sugiyanto

MARINE CARGO INSURANCE &
CLAIM
Training for Basic Freight Forwarding
UNESCAP STANDARD
Prepared By : Fx.Sugiyanto,SH
Mobile : 0816870719
Email: fx.sugiyanto.sh@gmail.com
IMPORTANT NOTICE
This Training Material belongs to ALFI INSTITUTE
This material is prohibited to be copied or to be used to any media outside
without any written consent from ALFI INSTITUTE
infainstitute@infa.or.id
2
OBJECTIVES

Ø  To gain an overview to cargo insurance;
Ø  To understand what the fundamental principles of cargo
insurance;
Ø  To understand the various types of losses;
Ø  To understand the various insurance documents;
Ø  Identify important terms of a cargo policy and
understanding what open cover advantage to FF;
Ø  Identify different coverage between the ICC (A), (B) and
(C)
Ø  Understand the concept of burden of proof and
warranties;
Ø  Understand the duration cover of cargo insurance.
Modul – MARINE CARGO INSURANCE

3

FUNDAMENTAL PRINCIPLES OF
INSURANCE
§ Insurable Interest;
•  Utmost Good Faith;
•  Proximate Cause;
•  Indemnity;
•  Subrogation and Contribution.
Question.
1.  Whether the carrier liable for cargo carried?
2.  Why the cargo Owner insured their cargo during
the transit?
3.  What the different of the maximum limit indemnity
of cargo insurer compared with the limit of carrier’s
liability?
Modul – MARINE CARGO INSURANCE 4
PRINCIPLE OF INDEMNITY
Modul 11-‐MARINE CARGO INSURANCE 5

METHODS OF INDEMNITY
FROM THE INSURER

•  Payment in cash;
•  Repair the damage;
•  Replacement;
•  Reinstatement;
Modul 11-‐MARINR CARGO INSURANCE 6

FUNDAMENTAL PRINCIPLES
Modul – marine cargo insurance 7

UTMOST GOOD FAITH
Uberimae Fidei
}  As the underwriter knows nothing and the man who
comes to him to ask him to insure knows everything,
therefore it is the duty of the assured…to make a
full disclosure to the underwriter without being asked
of all the material circumstances.
}  This is expressed by saying it is a contract of the
utmost good faith.’
(Rozanes v. Bowen (1928)

INSURANCE
WHAT IS INSURANCE IN GENERAL?
§  It is a legal contract;

§  It is used to share risk;
§  Activates only after something has gone wrong;
What does actually insured buy?
§  Peace of mind! What that mean?
Modul – marine cargo insurance 9

WHAT IS RISKS?
Modul – MARINE CARGO INSURANCE 10

WHAT IS THE ODDS?
•  Both Gambling and Insurance involve transfer of
risk and reward;
•  Gambling creates Loser and Winner;
•  Insurance not, just offers to replace loss/indemnity,
but not to create Pure Gain;

Cont’ed
•  Gamblers can continue spending, buying more risks

than they can afford;
•  Insurance buyers are risks avoiders, transfer their
needs to reduce exposure to Large losses.
•  Insurer reduced/sharing risk by way of re-insurance
Modul 11 – Marine Cargo Insurance

12

Cont’ed
•  Gambling is designed so that odds are not affected by

player’s conduct or behavior;
•  Insurance requires policy holders to conduct risk
mitigation practices such as installing fire sprinklers,
fire proof materials to reduce odds of loss;
•  Insurers specialize is rehabilitation to minimize the risk,
mainly in Total Loss risk.
Modul 11 – Marine Cargo Insurance

13

WHAT INSURANCE
MARKET?
} 
Who are the players?

Ø  The insured/assured (buyer);
Ø  The underwriter (seller);
Ø  The insurer/insurance company;
Ø  The insurance broker, Agent
(intermediary);
Ø  The loss adjusters.

ELEMENTS OF INSURANCE
}  Insured must be subject to a real risk;

}  Risk must be important enough;
}  Cost of insurance must not be prohibitive.
}  Accident could not be predicted:
Modul 11-‐Marine Cargo Insurance

15

LAW OF AVERAGES…CONSEQUENCES
•  Exact opposite with gambling;

•  Preeminently social in nature;
•  Accumulation of large funds;
•  Catastrophes prevent proper working
of law of average;
•  Size of individual risk do not vary
greatly;
•  Random selection of risks.

INSURABLE RISKS…7 COMMON
CHARACTERISTICS
1.  Law of big numbers;

2.  Random selection of risks;
3.  Loss is an Accident;
4.  Large Loss;
5.  Affordable premium;
6.  Calculable Loss;
7.  Limited risk of catastrophically large loss.

BUSINESS RISK

MARINE INSURANCE IN
INCOTERMS®2020

CARRIAGE CONVENTIONS
20
17 Exceptions of Sea carriers’
responbility, under the
HAGUE-VISBY DEFENSES
1.  Neglect of carrier in the navigation or in the management of the ship
2.  Fire (unless by fault of the carrier)
3.  Perils, dangers, and accidents of the sea
4.  Act of God
5.  Act of war
6.  Act of public enemies
7.  Arrest, restraint, or seizure
8.  Quarantine restrictions
9.  Act of omissions of the shipper or owner
10.  Strikes, lockouts, or labor stoppage
11.  Riots and civil commotions
12.  Inherent defect, quality, or vice of the goods
13.  Insufficiency of packing
14.  Insufficiency or inadequacy of marks
15.  Latent defects not discoverable by due diligence
16.  Saving life or property at sea (general average)
17.  Any other cause arising without the actual fault of the carrier
§  WARRANTIES?
}  Fundamental conditions and a breach allows the

aggrieved party to repudiate the contract. It is an
undertaking that something shall or shall not be done or
that a certain state of affairs exists, or does not exist.
}  Bearing in mind! Do not hide facts which you are really
know, unless latent defect. What latent defect?

PROXIMATE CAUSE
‘Proximate cause means the active, efficient cause that sets
in motion a train of events which bring about a result,
without the intervention of any force started and working
actively from a new and independent source.’
The standard legal case of Pawsey v. Scottish Union and
National (1907)

Cont’d
The proximate cause is not the first cause,

nor the last cause, it is the dominate cause
(Leyland Shipping Co. v. Norwich Union (1918)
or the efficient or operative clause
(P. Samuel & Co. v. Dumas (1924)

SUBROGATION
Is the right of one person to stand in the
place of another and avail himself of all
the rights and remedies of that other,
whether already enforced or not.
In the case of Burnand v. Rodocanachi (1882)
The fundamental point is that the
insured is entitled to indemnity but no
more than that.
It allows the insurer to recoup any profit the
insured might make or reduce the loss from
an insured event.
Provided, …? The insurer has paid the claim.
TYPES OF MARINE CARGO
POLICIES
§  The shipper or insured covers the risks depending on the terms of
letter of credit/ export order;
§  The Institute of London Underwriters has drawn up the different
clauses in marine insurance policy in respect of risk coverage;
§  Different marine insurance policies with different risk coverage are:
1.  Institute Cargo Clause A: This policy covers all the risks of loss
or damage to goods. This is the widest cover
2.  Institute Cargo Clause B: This policy covers risks less than
under clause ‘A’.
3.  Institute Cargo Clause C: This policy covers lowest risks/TLO.
NOTE: War and Strikes, Riots and Civil CommoYon (SRCC) clause is
excluded in all the above policies. These risks can be covered by
specifically asking for, paying addi:onal premium.
but can be bought back through an endorsement or by a separate
policy.

Modul 11.MARINE CARGO INSURANCE 26
COVERED PERILS
}  The perils of principal importance covered by Hull and

Cargo policies are the “perils of and at sea,” ?
}  But, only accidental, unanticipated losses occurring
through extraordinary action of the elements at sea, as
well as mishaps in navigation such as collision with
another vessel or running aground.
}  Various other perils – such as fire, lightning, or
earthquake are also named in the perils clause;
}  “all-risks” policy was introduced, which states that any
risk of physical loss is covered unless it is specifically
excluded

ICC 1.1.82 HEADINGS OF THE
POLICY
1.  Risks covered; (lists those risks actually covered in each

case)
2.  Exclusion; (clarify the position of underwriters regarding
unseawothiness, insufficiency and unsuitability of packing
including stowage and insolvency etc)
3.  Duration of cover;
4.  Claims;
5.  Benefit of insurance;
6.  Minimising losses;
7.  Avoidance of delay;
8.  Law and practice; (It applies where a foreign jurisdiction
clause attaches to the policy and requires that the foreign
Court shall base its decisions on English law and practice)
9.  Footnote.
ICC (C) 1.1.82 COVERS
1.1.1 Fire or Explosion;
1.1.2 Vessel stranded, grounded, sunk or capsized;
1.1.3 Overturning or derailment of land conveyance;
1.1.4 Collision;
1.1.5 Cargo discharged at port of
distress;
1.2.1 General average sacrifice;
1.2.2 Jeason;

ICC (B) 1.1.82 COVERS
1.1.1 to 1.1.5 in (C) Clause
1.1.6 Earthquake, volcanic eruption or lightning;
1.2.1 General Average;
1.2.2 Jettison;
1.2.3 Entry of water;
Including Total Loss of package lost overboard or loading
unloading from vessel.

ICC (A) 1.1.82 COVERS

All risks of physical loss or damage
i.e. accidental not inevitable
Specifically excludes loss from
inherent vice or delay

TABLE OF COMPARISON/
SUMMARY
Risks (A) (B) (C) Remarks
Handling damage of cargo Yes No No >70% of

Claims
Wet damage Yes Yes, if No Common
entry into
vessel but
not wet by
rain
Theft/Pilferage Yes No No Esp.
valuable
cargo
Cont’ed
Risk (A) (B) (C) Remarks
Non-delivery / missing Yes No No Common
Contamination/staining by other Yes No No

cargo
Washing overboard Yes Yes Yes Impt for deck
cargo
Fire & Explosion Yes Yes Yes Major casualty
Stranding/grounding/sinking/capsizing of Yes Yes Yes ditto

vessel
Overturning or derailment of land Yes Yes Yes ditto
conveyance
Cont’ed
Risk (A) (B) (C) Remarks
Collision Yes Yes Yes Major casualty

Heavy weather, stowage collapse/ Yes No No
break loose in ship’s hold
Discharge cargo at port of distress Yes Yes Yes Major casualty
Earthquake, volcanic eruption or Yes Yes No Uncommon,
lightning tsunami covered
General average contribution Yes Yes Yes Major casualty
Salvage contribution Yes Yes Yes Major casualty
Piracy – both land and sea Yes No No Common in S.E.A.
waters and parts of
Indo-china
Modul 11-‐MARINE CARGO INSURANCE

34

Perils A B C
Rough/Improper handling X X
ü 
Water damage X X
ü  Unless entry of
water into vessel’s
hold/container
Theft, Pilferage & Non - X X

Delivery ü 
Road Accidents X X
ü 
35

TYPES OF CARGO POLICIES
Ø  Open Covers:
1.  It is usually the regular exporters/FF who have standing
arrangements with their marine insurer where all their
shipments are automatically will be insured;
2.  assured undertakes to advise to his insurers of all his
shipments, and the insurer agrees to insure those of
shipments declared;
}  Floating Policies:
1.  It is issued with a sum insured sufficient to cover a number of
consignments.
2.  As and when they are shipped declarations are made and the
sum insured of the policy is reduced by the value of the goods
shipped.
3. This procedure continues until goods have been dispatched to
a value
Modul that
11.MARINE equals
CARGO the floating sum insured.
INSURANCE
36

TYPES OF LOSSES COVERED
}  Total Loss.
}  A. Actual total loss may take any of three basic forms:
1.  Physical destruction (e.g. foundering, loss by fire,
missing ship;.
2.  Loss of specie. This has been defined as cargo that no
longer answers the description of the interest insured;
3.  Irretrievable debridement (e.g. capture).
Ø  B. Constructive Total Loss:
cargo policies ordinarily contain a provision stating that
there will be no recovery for a constructive total loss unless
the property is reasonably abandoned in expectation of its
becoming an actual total loss without expending more than
the value of the property.
Modul 1 – MARINE CARGO INSURANCE 37

Cont’ed
}  Particular Average. In marine insurance, an “average” is a

partial loss of vessel or cargo.
A particular average is a partial loss that is to be borne by only a
particular interest (such as the vessel alone or one of the various
cargo interests aboard);
}  General average is a partial loss that must be borne
proportionally by all interests in the maritime venture (such as the
vessel and all owners of cargo aboard the vessel on a particular
voyage).
There is a general average act when an extraordinary sacrifice

or expenditure is intentionally and reasonably made or incurred
for the common safety for the purpose of preserving from peril the
property involved in a common maritime adventure.
MV. Ever Given Salvage in Suez Canal; Feeder vessel X-Press Pearl
caught by fire in southern of Colombo

Modul 1 – MARINE CARGO INSURANCE 38

WHAT IS THE INFORMATION
THE INSURER IS EXPECTED TO
KNOW?
§  Matters of common notoriety or common
knowledge i.e. from daily newspapers;
§  Matters, which in the ordinary course of
insurer’s business it ought to know i.e.,
access to Lloyd’s Register of Shipping,
Bimco, trade terms, shipping conditions,
navigational hazards, climatic conditions,
and types of packing.

WHAT IS THE INFORMATION
THE INSURED IS EXPECTED
TO PROVIDE?
§  Material facts which would influence an insurer
to accept or reject the insurance or fix an
appropriate premium;
§  Material facts which he actually knows and which
he should know in the ordinary course of his
business (if a material fact is not disclosed the
result is the same – innocent or deliberate – the
insurer is entitled to avoid the contract).
Modul 11-‐marine cargo insurance 40

THE INSURANCE PREMIUM
There are 2 parties to a marine insurance contract.
1.  The insurer, who agree to pay claims according to the
contract;
2.  The assured, who agrees to pay the premium or
consideration for the performance.
Ø  sum of money paid or payable to the insurer is called “the
premium”
Ø  IMPORTANT !!!
Ø  it is not compulsory under an act/Law for the exporter
to insure his overseas shipments, it is common
business prudence which demands it. vide Incoterm
Ø  Moreover, the contract of sale, or the need of bank
finance, may dictate to insure.
Ø  The exporter usually has the choice, however, of
employing a broker or an Insurance Agent or insuring
direct with an insurance company.
Modul 11-‐marine cargo insurance
41

SPECIAL INSURANCE COVER FOR
SPECIAL CARGO
Other than Standard Ins:tute
Clauses:
}  Ins:tute Bulk Oil Clauses;
}  Ins:tute Frozen Food Clauses;
}  Ins:tute Sugar Clauses;
}  Ins:tute coal clause, …

42

BULK CARGOES

43

Cont’ed
Risks factors to consider:
Ø  Cargo shifting?;
Ø  Spontaneous combustion in
cargoes such as coal and
grains;
Ø  Liquefied, such as Nickel in
bulk
Ø  Corrosion such as sulphure;
Ø  Attitude of ship-owners/
Moral hazard.

44

OIL CARGO

Risk factors to consider:
}  SuscepYble to loss of volume
due to evaporaYon;
}  High fire & explosion risk;
}  Serious and catastrophic
polluYon.

45

FROZEN PRODUCTS
Risk factors to consider.
}  Perishable goods;
}  Contamination / Taint;
}  Refrigeration and suitability of containers;
}  Package and preparation of frozen food.

46

Cont’ed

47

BURDEN OF PROOF
}  Burden of Proof Insurance is the only Insured duty to
proof;
}  Duty of proving loss lies with the Insured;
}  All rights against third parties are
preserved and exercised;
}  Each carrier is responsible to
exercise due care and to have
own protection.

48

POLICY EXCLUSIONS
4.1 Wilful Misconduct
}  Difficult to prove;
}  Fraud by Insured.
}  4.2 Ordinary leakage or loss of weight/

volume;
}  or ordinary wear and tear.

49

Cont’ed
4.3 Insufficient or unsuitability of packing or prepara:on of
cargo


50

Cont’ed
•  4.3 loss damage or expense caused by insufficiency or

unsuitability of packing or preparation of the subject
matter insured to withstand the ordinary incidents of the
insured transit;
•  where such packing or preparation is carried out by the
Assured or their employees or prior to the attachment of
this insurance;
•  (for the purpose of these Clauses “packing” shall be
deemed to include stowage in a container and
“employees” shall not include independent contractors).

51

}  Inherent Vice or nature of subject matter


52

Cont’ed
•  4.4 loss damage or expense caused by inherent vice or
nature of the subject-matter insured;
•  What is inherent vice? It is natural behavior of things –
such as fruit ripening.
. 5.5 MIA: in no case shall this insurance cover

loss damage or expense arising from unseaworthiness of
vessel or craft or unfitness of vessel or craft for the safe
carriage of the subject-matter insured, where the Assured
are privy to such unseaworthiness or unfitness, at the
time the subject-matter insured is loaded

53

Cont’ed
5. Unfitness of container or conveyance

54

Cont’ed
•  5 in no case shall this insurance cover loss damage or

expense arising from:
}  Unfitness of container or conveyance for the safe
carriage of the subject-matter insured,
•  where loading is carried out prior to attachment of
this insurance;
•  or by the Assured or their employees and they are
privy to such unfitness at the time of loading;
•  e.g. not doing a light check in a container before
accepting it.

55

Cont’ed
6.1 War, civil war, revolution and rebellion

56

Cont’ed
•  6.1 war civil war revolution rebellion insurrection, or civil

strife arising therefrom, or any hostile act by or against a
belligerent power;
•  6.2 capture seizure arrest restraint or detainment (piracy
excepted), and the consequences thereof or any attempt
thereat;
•  6.3 derelict mines torpedoes bombs or other derelict
weapons of war.

57

Cont’ed
7.1 Strike riot

58

Cont’ed
•  7.1 caused by strikers, locked-‐out workmen, or persons taking
part in labour disturbances, riots or civil commoYons;
•  7.2 resulYng from strikes, lock-‐outs, labour disturbances, riots
or civil commoYons;
•  7.3 caused by any act of terrorism being an act of any person
acYng on behalf of, or in connecYon with, any organisaYon
which carries out acYviYes directed towards the overthrowing
or influencing, by force or violence, of any government
whether or not legally consYtuted;
•  7.4 caused by any person acYng from a poliYcal, ideological or
religious moYve.

59

POLICY WARRANTIES
Examples:
}  Warranted no loss before xx
date and time
}  Warranted pre-loading
inspection carried out by xx
company
}  Warranted no hooks (e.g.
bagged cargo)
}  Warranted no transhipment

60

DURATION OF COVER
Ø  Warehouse to warehouse/door to
door
Ø  Starts when cargo leaves for
commencement of transit
Ø  Continue during ordinary course
of transit
Terminates on
1.  delivery to warehouse on
desYnaYon;
2.  delivery to warehouse used by
consignee for storage or distribuYon;
3.  expiry of 60 days upon compleYon of
discharge from overseas vessel,
Modul 11-‐MARINE CARGO INSURANCE “whichever shall first 61 occur”

Cont’ed

}  “Ex Tackle”

}  Delivery to parYcular locaYon e.g. ship at anchorage,
machine removers, exhibiYon specialists;
}  Lihing, shihing, posiYoning, uncraYng, temporary
storage aher arrival;
62

TYPES OF LOSSES

63

TYPES OF LOSSES

64

CARGO CLAIM

65

OBJECTIVES
Concept of sue and labour and duties of the

Insured
}  To gain a working knowledge claims procedures
and documentation;
}  To apply concepts to a claims situation.

66

CLASSES OF LOSS
Total losses can be sub-divided into:
}  Absolute or actual total losses
}  Constructive total losses (including salvage losses)

67

TOTAL LOSS
}  Subject maier is totally destroyed

68

TOTAL LOSS
}  Irretrievably deprived thereof

69

TOTAL LOSS
}  Cease to be a thing of the kind insured

70

CONSTRUCTIVE TOTAL LOSS

71

CONSTRUCTIVE TOTAL LOSS
Constructive total loss of cargo

}  It is unlikely he will recover it
}  The cost of recovery will exceed he value of the
goods when recovered
}  Where the goods are damaged and cost of re-
conditioning and forwarding to destination will
exceed their value on arrival

72

LOSS OTHER THAN TOTAL LOSSES
}  Particular Average (partial loss accidental)

}  General Average (partial loss voluntary sacrifice)
}  Particular Charges
}  Sue & labour charges
}  Contributions to GA and salvage

73

Particular average
Is partial loss caused accidentally and exclude:
}  Damage by wear and tear, gradual deterioration by
normal use and ordinary action of wind and waves
}  Defects in existence at the time insurance attaches
}  Damage done voluntary for common safety in time of
peril (which constitutes a general average sacrifice

74

General Average arises whenever a sacrifice of

property or an extraordinary expenditure is
reasonably and voluntary made or incurred for
the common safety of the interests concerned in
a maritime adventure, e.g. in a port of refuge, in
order to make the ship fit to proceed after having
sustained accidental damage during the voyage.

75

The Difference between General Average Loss and Particular
Average Loss
1. General average is incurred for the benefit of all interests but the
particular average is in connection with any of the interests.
2. General average is always voluntary and intentional but the
particular average is an accidental or fortuitous.
3. General average is shared by all those who are benefited by the
general average act. Particular average is paid by the insurer.
4. General average may include expenditure and sacrifice along with
loss, whereas the particular average results from a loss or damage.

76

SUE & LABOUR
Duty of Insured is to act as uninsured i.e.
}  Take steps to minimize or avert loss
}  Ensure rights of recovery against carriers and bailees are
not prejudiced
77
SUE & LABOUR
}  Notice period – Preservation of subrogation rights
}  Sea Carriage – Hague/Hague Visby Rules – 3 days
}  Air Carriage – Warsaw Convention – 7 days
}  Other Claims – Contractual Terms e.g. std trading
conditions of SLA within 14 days

78

BASIC OF ADJUSTMENT
Sue & Labour:
}  Reasonable expenses incurred to prevent or minimize a
loss
}  Supplementary in nature i.e. claimable on top of sum
insured
}  Efforts need to be reasonable; not successful
}  Loss must first be covered by policy

79

SUE & LABOUR
Guidelines:
}  File notice of claim immediately against all parties
}  Do not clear cargo against clean receipts
}  Arrange joint survey with carrier, if possible
}  Preserve all evidence, e.g. broken seal

80

SURVEYORS & ADJUSTERS
Fundamental functions of adjusters:
}  Adjust quantum of loss within specific terms of insurance
policy
}  Examine cause of loss and apply terms of insurance
policy to that cause
}  Negotiate claim settlement acceptable to
the various parties
}  Pursue recovery against parties who could
have caused loss

81

CLAIMS
What can you claim?
Material damage or loss
And
Sue & labour expenses


82

CLAIMS
Scenario 1
}  Semi-conductor arrived by air from Japan
}  Before unloading at the consignee’s premises,
impact indicator found activated
}  No local facilities for repairs
}  Machinery shipped back to Japan for repairs

83

CLAIMS COMPUTATION
Scenario 2
}  Insured value of 5 cartons of clothing: US$1,100
}  1 out of 5 cartons wet
}  1 carton contains 50 pcs
}  25 pcs wet and considered damaged
}  CIF value of one carton/50pcs: US$1,000
}  Salvage value of 25 wet pcs: US$50

84

CLAIMS COMPUTATION
CIF value of 25 pcs = US$500

@ 110% = US$550
Less salvage value = US$ 50
Net amt claimable = US$500

85

CLAIMS COMPUTATION
Scenario 3
}  Insured machine valued at $100,000 damaged
during transit
}  Cost of replacement parts with freight and
insurance : $25,000
}  Cost of engineer’s assessment & testing: $500
}  Labour costs : $1,000
}  Spray painting costs : $250
}  Less scrap value of damaged parts: $50

86

CLAIMS COMPUTATION
Cost of replacement parts = $25,000

Cost of engineer’s fee =$ 500
Labour costs of repair = $ 1,000
Spray painting cost =$ 250
Total costs = $26,750
Less scrape value =$ 50
Policy pays = $26,700

87

Role:
}  Independent party
}  Surveyors not always associated with claims
}  Difference:
Surveyor – nature & extent of loss
Adjuster – in addition, policy terms and
subrogation

88

Litigation support/Dispute resolution

89

Supervision of movement of project cargo


90

}  Cargo escort

91

END OF VOYAGE
Thank you for your :me.

Fx. Sugiyanto
E mail : fx.sugiyanto.sh@gmail.com
Mobile/WA : +62 816 870719

Modul –MARINE CARGO INSURANCE 92

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MARINE CARGO INSURANCE &

Modul – MARINE CARGO INSURANCE

Modul 11-­‐MARINE CARGO INSURANCE 5

Modul 11-­‐MARINR CARGO INSURANCE 6

Modul – marine cargo insurance 7

Modul 11-­‐MARINE CARGO INSURANCE 8

WHAT IS INSURANCE IN GENERAL?

§ It is a legal contract;

§ Peace of mind! What that mean?

Modul – marine cargo insurance 9

Modul – MARINE CARGO INSURANCE 10

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• Gamblers can continue spending, buying more risks

Modul 11 – Marine Cargo Insurance

• Gambling is designed so that odds are not affected by

Modul 11 – Marine Cargo Insurance

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} Insured must be subject to a real risk;

Modul 11-­‐Marine Cargo Insurance

• Exact opposite with gambling;

Modul 11-­‐MARINE CARGO INSURANCE 16

1. Law of big numbers;

Modul 11-­‐MARINE CARGO INSURANCE 17

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} Fundamental conditions and a breach allows the

Modul 11-­‐MARINE CARGO INSURANCE 22

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The proximate cause is not the first cause,

Modul 11-­‐MARINE CARGO INSURANCE 24

} The perils of principal importance covered by Hull and

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1. Risks covered; (lists those risks actually covered in each

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Handling damage of cargo Yes No No >70% of

Non-delivery / missing Yes No No Common

Contamination/staining by other Yes No No

Stranding/grounding/sinking/capsizing of Yes Yes Yes ditto

Collision Yes Yes Yes Major casualty

Modul 11-­‐MARINE CARGO INSURANCE

Theft, Pilferage & Non - X X

Modul 1 – MARINE CARGO INSURANCE 37

} Particular Average. In marine insurance, an “average” is a

There is a general average act when an extraordinary sacrifice

Modul 1 – MARINE CARGO INSURANCE 38

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Modul 11-­‐marine cargo insurance

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Modul 11-­‐marine cargo insurance

Modul 11-­‐marine cargo insurance

Modul 11-­‐marine cargo insurance

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} 4.2 Ordinary leakage or loss of weight/

Modul 11-­‐marine cargo insurance

Modul 11-­‐MARINE CARGO INSURANCE

• 4.3 loss damage or expense caused by insufficiency or

Modul 11-­‐MARINE CARGO INSURANCE

Modul 11-­‐MARINE CARGO INSURANCE

. 5.5 MIA: in no case shall this insurance cover

Modul 11-­‐MARINE CARGO INSURANCE

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§  It is a legal contract;

§  Peace of mind! What that mean?

Modul 11-‐MARINE CARGO INSURANCE 11

•  Gamblers can continue spending, buying more risks

•  Gambling is designed so that odds are not affected by

Modul 11-‐MARINE CARGO INSURANCE 14

}  Insured must be subject to a real risk;

Modul 11-‐Marine Cargo Insurance

•  Exact opposite with gambling;

Modul 11-‐MARINE CARGO INSURANCE 16

1.  Law of big numbers;

Modul 11-‐MARINE CARGO INSURANCE 17

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}  Fundamental conditions and a breach allows the

Modul 11-‐MARINE CARGO INSURANCE 22

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}  The perils of principal importance covered by Hull and

Modul 11-‐MARINE CARGO INSURANCE 27

1.  Risks covered; (lists those risks actually covered in each

Modul 11-‐MARINE CARGO INSURANCE 29

Modul 11-‐MARINE CARGO INSURANCE 30

Modul 11-‐MARINE CARGO INSURANCE 31

Modul 11-‐MARINE CARGO INSURANCE

}  Particular Average. In marine insurance, an “average” is a

Modul 11-‐MARINE CARGO INSURANCE 39

Modul 11-‐marine cargo insurance 40

Modul 11-‐marine cargo insurance

Modul 11-‐marine cargo insurance

Modul 11-‐marine cargo insurance

Modul 11-‐marine cargo insurance

Modul 11-‐marine cargo insurance

Modul 11-‐marine cargo insurance

Modul 11-‐marine cargo insurance

}  4.2 Ordinary leakage or loss of weight/

Modul 11-‐marine cargo insurance

Modul 11-‐MARINE CARGO INSURANCE

•  4.3 loss damage or expense caused by insufficiency or

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

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•  5 in no case shall this insurance cover loss damage or

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

•  6.1 war civil war revolution rebellion insurrection, or civil

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

}  “Ex Tackle”

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}  Irretrievably deprived thereof

Modul 11-‐MARINE CARGO INSURANCE

}  Cease to be a thing of the kind insured

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

}  Particular Average (partial loss accidental)

Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE

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Modul 11-‐MARINE CARGO INSURANCE

Modul 11-‐MARINE CARGO INSURANCE