1.

Risk:
The term Risk is used to describe all the accidental happenings which produce a monetary loss.
e.g.: A factory catching fire, a ship sinking, serious illness (cho 1 ví dụ trong đời sống (tai nạn, bệnh
tật, mất mát); 1 ví dụ trong hàng hải, 1 ví dụ trong trách nhiệm đối với bên thứ ba)
Definition: Risk is defined here as uncertainty concerning the occurrence of a loss
- Objective risk (also called degree of risk) is defined as the relative variation of actual loss from
expected loss
- Subjective risk (perceived risk) is defined as uncertainty based on a person’s mental condition
or state of mind
Classification of risk
● Pure and speculative risk:
Pure risk is defined as a situation in which there are only the possibilities of loss or no loss;
Ex.: Premature death, job-related accidents, damage to property from fire
Speculative risk is defined as a situation in which either profit or loss is possible.
Ex.: purchase 100 share of stocks, profits if the price increases, lose if the price declines
● Diversifiable risk and nondiversifiable risk:
- Diversifiable risk is a risk that affects only individuals or small groups and not the
entire economy. It is also called nonsystematic risk or particular risk.
Ex: a diversified portfolio of stocks, bonds, and certificates of deposit (CDs)
- Nondiversifiable risk is a risk that affects the entire economy or large numbers of
persons or groups within the economy.
Ex: rapid inflation, cyclical unemployment, war, hurricanes, floods, and earthquakes

● Enterprise risk is a term that encompasses all major risks faced by a business firm. Such risks
include pure risk, speculative risk, strategic risk, operational risk, and financial risk.
- Strategic risk refers to uncertainty regarding the firm’s financial goals and objectives.
- Operational risk results from the firm’s business operations.
- Financial risk refers to the uncertainty of loss because of adverse changes in commodity prices,
interest rates, foreign exchange rates, and the value of money.

● Personal risks are risks that directly affect an individual or family.

Ex: Premature death, Inadequate retirement income, Poor health, Unemployment

Chance of loss: is defined as the probability that an event will occur.

 2. benefits of risk management?
● A formal risk management program enables a firm to attain its pre-loss and post-loss objectives
more easily.
● The cost of risk is reduced, which may increase the company’s profits. The cost of risk is a risk
management tool that measures the costs associated with treating the organization’s loss
exposures. These costs include insurance premiums paid, retained losses, loss control
expenditures, outside risk management services, financial guarantees, internal administrative
costs, and taxes, fees, and other relevant expenses.
● Because the adverse financial impact of pure loss exposures is reduced, a firm may be able to
implement an enterprise risk management program that treats both pure and speculative loss
exposures.
● Society also benefits since both direct and indirect (consequential) losses are reduced. As a
result, pain and suffering are reduced.
3. risk management? The steps of risk management
A process that identifies loss exposures faced by an organization and selects the most appropriate
techniques for treating such exposures
Loss exposure: is any situation or circumstance in which a loss is possible, regardless of whether a
loss occurs
Step 1: Identify loss exposures.
Step 2: Measure and analyze the loss exposures.
Step 3: Select the appropriate combination of techniques for treating the loss exposures.
Step 4: Implement and monitor the risk management program.

4. Pre-loss objective and post-loss objective of risk management

Before the loss:

Economy Reduced anxiety Meeting legal obligations

prepare for possible happenings

Reduce fear created because - of
Satisfies responsibilities imposed
in economical ways consistent
uncertainty and costs by others
with post loss goals - Requirement of insured property
as collateral

After the loss:

 Survival Continue operating
Stability of earnings
Continued growthSocial responsibility

Most important Important

& for Continue
the operations
Product & Market
Good citizenship
basic post loss
entity to continuewithout
to increase Development
in resulting in a good
objective serve clients and
cost image
customers Acquisitions &
Aim is to ensure at Funds to replace loss
Mergers
least partial
They may otherwiseearnings resulting
resumption turn
of to competitors
from loss of operation
operations with
and not return
reasonable time frame A combination of the
above
Perfect stability is not
the goal

● Pre-loss objectives:
- The first objective means that the firm should prepare for potential losses in the most
economical way.
- The second objective is the reduction of anxiety.
- The final objective is to meet any legal obligations.
● Post-loss objectives:
- The most important post-loss objective is survival of the firm.
- The second post-loss objective is to continue operating.
- The third post-loss objective is stability of earnings.
- The fourth post-loss objective is continued growth of the firm.
- Finally, the objective of social responsibility is to minimize the effects that a loss will have on
other persons and on society.

5. Steps (phases) in Risk Management process

Steps in personal risk management:
+ Identify loss exposures: This step is to identify all major and minor loss exposures, it involves
a painstaking analysis of all potential losses (classify into types).
+ Measure and analyze the loss exposures: This step involves an estimation of the frequency
and severity of loss. Loss frequency refers to the probable number of losses that may occur
during some given time period. Loss severity refers to the probable size of the losses that may
occur.
 + Select the appropriate combination techniques for treating loss exposures:

● Risk control:
Avoidance, Loss prevention, Loss reduction, duplication, separation, diversification
● Risk financing: Retention, Non-insurance transfers, Commercial insurance
- Implement and monitor the risk management program
6. Loss exposure
The term risk is ambiguous and has different meanings, many authors and corporate risk managers use
the term “loss exposure” to identify potential losses. A loss exposure is any situation or
circumstance in which a loss is possible, regardless of whether a loss occurs.

Examples of loss exposures include manufacturing plants that may be damaged by an earthquake or
flood, defective products that may result in lawsuits against the manufacturer possible theft of
company property because of inadequate security, and potential injury to employees because of unsafe
working conditions
7. Techniques for treating loss exposure

• Avoidance: a certain loss exposure is never acquired or undertaken, or an existing loss exposure is
abandoned (you try to avoid the risk by avoiding doing something causing the risk. However, you can
avoid this risk but maybe you can’t avoid other risks)
Ex: flood losses can be avoided by building a new plant on high ground, well above a floodplain. A
pharmaceutical firm that markets a drug with dangerous side effects can remove the drug from the
market to avoid possible legal liability
Pros: the chance of loss is reduced or eliminated because the activity or product that could produce a
loss has been abandoned.
Cons:
First, the firm may not be able to avoid all losses. For example, a company may not be able to avoid
the premature death of a key executive. Second, it may not be feasible or practical to avoid the
exposure. For example, a paint factory can avoid losses arising from the production of paint. Without
paint production, however, the firm will not be in business.
• Loss prevention: aims at reducing the probability of loss so that the frequency of losses is reduced
Ex: Auto accidents can be reduced if motorists take a safe-driving course and drive defensively.
The number of heart attacks can be reduced if individuals control their weight, stop smoking, and eat
healthy diets.
• Loss reduction: reduce the severity of a loss after it occurs:
Ex: install a sprinkler system so that a fire will be promptly extinguished
• Duplication
Duplication refers to having back-ups or copies of important documents or property available in case a
loss occurs. Examples include back-up copies of key business records (e.g., accounts receivable) in
case the original records are lost or destroyed. Backups of important property may also be kept on
hand. For example, if a key part of an assembly breaks down, having the part available immediately
will prevent the assembly line from shutting down until the part can be obtained.
• Separation
Separation means dividing the assets exposed to loss to minimize the harm from a single event. A
manufacturing company, for example, may divide the production area of a plant into four quadrants by
using 6-foot-thick concrete walls. A fire may damage production in one quadrant, but the thick
concrete walls prevent the fire from spreading. Similarly, a manufacturer may store finished goods in
two warehouses in different cities. If one of the warehouses is damaged or destroyed, the finished
goods in the other warehouse are unharmed.
• Diversification Diversification refers to reducing the chance of loss by spreading the loss exposure
across different parties (e.g., customers and suppliers), securities (e.g., stocks and bonds), or
transactions.
8. Insurance? Nature and benefit of insurance?
Insurance is a contract whereby, in return for the payment of premium by the insured, the
insurers pay the financial losses suffered by the insured as a result of the occurrence of
unforeseen events.

Nature:
i) Insurance provides financial protection against a loss arising out of happening of an
uncertain event (uncertain event này phải được thỏa thuận trong hợp đồng). A person can avail
(=take advantage of) this protection by paying a premium to an insurance company.
ii) Insurance is the risk transferring from the insured to the insurer
iii) Insurance works on the basic principle of risk sharing (many insureds share the same risk)
iv) The business object (đối tượng bảo hiểm) in the insurance sector is risk.
Benefits (advantages):
- Indemnification
+ Benefit paid or services rendered to insured who suffer covered losses
+ Continuity in operations at or close to the same rate as before the accident
 - Reduction of uncertainty:
+ permits lengthening planning horizons
+ Allows the firm to accept more uncertainties in other areas
+ May contribute to improved performance
Disadvantages:
- Less incentive for loss control:
+ Insurer’s expected loss estimate will rise, causing premiums to rise.
+ Insurance does not cover all the financial consequences of insured events.
+ Lax attitude toward loss control of insured events is likely to increase the incidence of non-
insured events.
- Exaggeration or false reporting of insured claims:
+ Subsequently premiums may rise or there may be difficulty retaining insusrance coverage.
+ Insured may benefit, by society does not
9. Principles of Insurance: 5 principles:
+ Insurance is a repayment of a random loss
+ Utmost good faith
+ Insurable Interest
+ Principle of indemnity
+ Principle of subrogation

10. Principle “utmost good-faith” in of insurance

• A higher degree of honesty is imposed on both parties to an insurance contract than is imposed on
parties to other contract.
Ex:
- Insured: provide material info -> insurer decide whether to accept risk or not -> If yes, what
rate of premium, terms & conditions
- Insurer: inform all rules, regulation, conditions related
● Material information is information which enables the insurer to decide:
a)Whether he will accept the risk and;
b)If so, at what rate of premium and subject to what terms and conditions

Ex of material facts:
- House: certificate of land use right, personal info, house info: year built, material used, type,
surrounding
- Camera: previous claims/damages, purpose of use, value, make, model, year
 - Car: owner info (driving history, claiming), vehicle (make, model, garage address, safety
features, modifications), NO need for financial info (car: pay 1 time, not repetitive; in case of
life insurance, YES)
• Breach of duty of utmost good faith arises in 2 ways:
- Non-disclosure of material facts: oversight, don’t think it’s essential
- Misrepresentation -> intentional
Case 1: người có minor disability, 0 ảnh hưởng công việc, declare negative, don’t think it’s essential -
> vẫn 0 được nhận BH

11. Principle “insurable interest” in of insurance

• The legal right enjoyed by the owner of a property to insure is called ‘Insurable Interest’. The
insurance will become null and void, without the insurable interest.
-> No insurable interest -> No insurance contract
• Purposes:
– To prevent gambling
– To reduce moral hazard
– To measure the amount of the insured’s loss in property insurance

• Insurable interest is where you have a valid reason to insure and stand to suffer a direct financial loss
if the event insured against occurs.
• Insurable interest exists when an insured derives a financial or other benefit from the continuous
existence of an insured object

• When must an insurable interest exist?

In property insurance, the insurable interest must exist at the time of the loss
- The insured must incur his financial loss
- You may not have an insurable interest in the property when the contract is first written but may
expect to have 1 in the future, at the time of possible loss
2 reasons:
● First, most property insurance contracts are contracts of indemnity. If an insurable interest does
not exist at the time of loss, the insured would not incur any financial loss. Hence, the principle
of indemnity would be violated if payment were made.
Case: if A sells his home to B, and a fire occurs before the insurance on the home is canceled. Who
can claim compensation?
Neither. A no longer owns the house -> NO insurable interest
B under Mark’s policy because B is not named as an insured. Nếu B muốn tiếp tục BH thì A phải báo
cho cty BH, nếu BH đồng ý, make changes to contract. Thường thì không được vì phải check B kỹ
mới ra quyết định.
● Second, you may not have an insurable interest in the property when the contract is first written
but may expect to have an insurable interest in the future, at the time of possible loss.
Ex: in ocean marine insurance, it is common to insure a return cargo by a contract entered into prior to
the ship’s departure. However, the policy may not cover the goods until they are on board the ship as
the insured’s property. Although an insurable interest does not exist when the contract is first written,
you can still collect to the extent of your interest if you have an insurable interest in the goods at the
time of loss.

- In life insurance, the insurable interest requirement must be met only at the inception of the
policy, NOT at the time of death. Life insurance is not a contract of indemnity but is a valued policy
that pays a stated sum upon the insured’s death. Because the beneficiary has only a legal claim to
receive the policy proceeds, the beneficiary does not have to show that a financial loss has been
incurred by the insured’s death.
Ex: if Michelle takes out a policy on her husband’s life and later gets a divorce, she is entitled to the
policy proceeds upon the death of her former husband if she has kept the insurance in force. The
insurable interest requirement must be met only at the inception of the contract.

• Who?
- Owner of property
- Potential legal liability
Ex: car clearing service provider, security guard,
- Secured creditors:
Borrow money from bank using house as security -> Bank can buy insurance
- Contractual right:
Buyer FOB: ký hợp đồng ngày 1, risk transfer ngày 10, ngày 9 hàng bị hỏng -> NO insurance. Nếu
damaged ngày 11, có coverage
*Life insurance:
- Beneficiary: bất kỳ ai
- Ai có thể mua: parents, children, husband/wife, grandparents, grandchildren
NO siblings, cousins (mưu đồ thừa kế, sóng gió gia tộc)
● Financial insurable interest: mua cho key stakeholder
12. Principle “indemnity” in of insurance:
• The principle of Indemnity states that under the policy of insurance, the insured has to be placed after
the loss in the same financial position in which he was immediately before the loss.
• 2 fundamental purposes:
– To prevent the insured from profiting from a loss
– To reduce moral hazard
In property insurance, indemnification is based on the actual cash value (ACV) of the property at
the time of loss
 13. Principle “subrogation” in of insurance
• Transfer of rights and remedies from the insured to the insurer who has indemnified the insured in
respect of the loss
• Subrogation means substitution of the insurer in place of the insured for the purpose of claiming
indemnity from a third person for a loss recovered by insurance.
• The principle of subrogation strongly supports the principle of indemnity
• The insurer is entitled to recover from a negligent third party any loss payment made to the insured
Ex: A negligent motorist hit a Mercedes car. The owner of a Mercedes car claims indemnification to
the insurance company. After receiving money, the owner of the car has to subrogate his indemnity
right to the insurance company to claim the negligent motorist

Nói dễ hiểu: First, Insurers indemnify the insured

Next, The insured transfer rights & remedies to insurer
tai nạn xe, hư kính
- Insurer đền
- Insured transfer rights -> Insurer on behalf of Insured claim back người gây tai nạn
- Mình 0 được claim nữa vì đã transfer
->Purposes:
• Prevent the insured from collecting twice for the same loss
• Is used to hold the negligent person responsible for the loss (BH có cách đòi được, nếu không BH sẽ
đem lên tòa -> reduce risk -> reduce rate)
• Help to hold down insurance rate (vì đòi được tiền bồi thường, nên sẽ giảm phí BH)

14. “The principle of subrogation strongly supports the principle of indemnity” Do you agree
with the statement? Please explain
Subrogation: Transfer of rights and remedies from the insured to the insurer
Indemnity: the insurer agrees to pay no more than the actual amount of the loss
•Explain: The insured cannot collect money twice from the same loss because the rights and remedies
have been transferred from the insured to the insurer. Now, only the insurer can claim indemnity from
a third party for a loss covered by insurance. -> fulfill the principle of indemnity (not more than value
of the loss)
15. types of insurance and give their definitions!
a. Based on operating mechanism of insurance: (căn cứ vào cơ chế hoạt động của bảo hiểm):
+ Social insurance: is the INSURANCE regime of the state, of social organizations or of the
company to subsidize employees in case of retirement, illness, etc. Including: social
INSURANCE regime of employees; Unemployment insurance; Health Insurance…. Social
insurance is usually mandatory, according to general regulations and not for business purposes.
For example: health insurance, unemployment insurance, social insurance regime for state
officials and employees,...
 + Commercial insurance: is a type of INSURANCE with a business, profit-making nature. This
type of insurance usually has the following characteristics: optional, taking into account each
object, each specific risk, for business purposes,...

+ Social Insurance (bảo hiểm xã hội): chế độ bảo hiểm của nhà nước, có tính chất bắt buộc,
theo luật lệ chung, ko nhằm mục đích kinh doanh, bảo vệ các rủi ro chung, ko tính đến rủi ro
cụ thế
Ex: bảo hiểm y tế, bảo hiểm thất nghiệp,...
+ Commercial insurance (bảo hiểm thương mại): bảo hiểm mang tính chất kinh doanh kiếm lời,
tính đến từng rủi ro cụ thể, từng đối tượng, KO bắt buộc
Ex: bảo hiểm xe máy, bảo hiểm hàng hải tùy thuộc vào từng loại hàng hóa và từng điều kiện Incoterms

b. Based on the nature of insurance: (căn cứ vào tính chất chất bảo hiểm)
● Life insurance: the subject of insurance is people (human life and lifespan).
Similar in nature to a bank (if the risk does not occur, the insured will still receive
the insurance money)
● Non-life insurance: are other types of insurance
+ Health insurance and personal accident insurance
+ Marine insurance
+ Property insurance and damage insurance
+ Insurance of goods transported by road, rail, air, ..
+ Fire and special perils insurance
+ Aviation insurance
+ Construction and installation insurance
+ Motor vehicle insurance
+ Forwarder Liability Insurance
+ Professional liability insurance

c. Based on subject-matter insured: (căn cứ vào đối tượng bảo hiểm): người, tài sản, TN
- Property insurance: the subject of insurance is property: money, valuable papers...
- Personal insurance: life insurance and non-life personal insurance.The subject matter of insurance
is human and human body parts Example for non-life insurance: Beckham buys insurance for body
parts,...
- Liability insurance: the subject of insurance is the insured's civil liability to a third person or to the
product.
Liability here is civil, PROFESSIONAL, not CRIMINAL liability
Based on law principles (căn cứ vào quy định pháp luật): bảo hiểm bắt buộc, bảo hiểm tự nguyện
- Compulsory insurance: is a type of insurance prescribed by law on insurance conditions, premium
rates, minimum insurance amount that organizations and individuals participating in insurance and
insurance enterprises are obliged to perform. presently.
Include:
Civil liability insurance of motor vehicle owners, civil liability insurance of air carriers for passengers
Professional liability insurance for legal consultancy activities
Professional liability insurance of insurance brokers
Fire insurance
16. Relationship: Insurance Value (V) and Insurance Amount (A) and the relationship
between them!?
Insurance value V (giá trị bảo hiểm): Giá trị của đối tượng bảo hiểm lúc bắt đầu bảo hiểm + phí bảo
hiểm + chi phí liên quan khác.
Insurance amount A (số tiền bảo hiểm): toàn bộ hoặc một phần giá trị bảo hiểm do người được bảo
hiểm yêu cầu và được bảo hiểm
Insurance amount (A) is always equal or smaller than Insurance Value (V): (A<=V)
+ A > V : Phần lớn hơn giá trị V sẽ ko được bồi thường. Chỉ bồi thường đến số tiền = giá trị V
mà thôi
+ A = V: bồi thường đúng giá trị V
+ A < V: chỉ bồi thường trong phạm vi A, phần còn lại do the insured tự bảo hiểm
Trong trường hợp bảo hiểm trùng ( mua bảo hiểm tại nhiều công ty khác nhau cho cùng một rủi ro,
một giá trị bảo hiểm), nếu có sự kiện bảo hiểm xảy ra, thì:
Nếu các công ty bảo hiểm phát hiện: công ty bảo hiểm chỉ chịu trách nhiệm theo tỷ lệ giữa số tiền bảo
hiểm đã thỏa thuận trên tổng số tiền bảo hiểm của tất cả các hợp đồng mà bên mua bảo hiểm đã giao
kết Nếu các công ty bảo hiểm không phát hiện được : trục lợi bảo hiểm
17. The fact “Insurance is a repayment of a random loss”:
Bảo hiểm chỉ bảo hiểm với những trường hợp tai nạn, sự cố, tai họa, xảy ra một cách bất ngờ, một
cách ngẫu nhiên, không lường trước được. Bồi thường cho những thiệt hại, mất mát ngẫu nhiên xảy ra
chứ không bồi thường cho thiệt hại chắc chắn xảy ra, đương nhiên xảy ra
Trong một vài tình huống thì để bảo vệ cho các sự cố chính (major claims), sự cố phụ (small
claims) thì không được bảo vệ → gọi là khoản khấu trừ (deductible) → nếu tổn thất hoặc thiệt hại
> khoản khấu trừ thì mới được bảo vệ bởi insurance policy

– The timing or occurrence of the loss must be uncertain.

Ex: you can't know your house is going to be destroyed in three weeks by a demolition team and still
get homeowners insurance.
– In some cases: To be able to fully service major claims, small claims are not covered. This is what
the deductible is for. Only damage or loss over the amount of the deductible is covered by the
insurance policy.
Insurers can prevent insured individuals from buying insurance for certainty by implementing 2
measures:
– Xét kỹ the insured trước khi ký hợp đồng:
Insurers require the insured to fulfill some checking (life insurance: health check)
– Trong hợp đồng có những điều khoản để ngăn ngừa những điều chắc chắn hoặc sẽ xảy ra:
Waiting Period: time you need to wait for, from the start of your policy, to be able to use the benefits
of it
Ex: bệnh thông thường: 30 ngày, bệnh đặc biệt: 1 năm, sinh con: 270 ngày
Maternity Cover (bảo hiểm thai sản) 10tr - insurance cover 150tr

The principle states that the loss covered by insurance policy must be outside the control of the
knowledge of the insured, you don't know whether it would happen or when it would happen. And it
must be the result of an event where the insured only loses, not gains. The loss is random so the
insured cannot financially enrich themselves through insurance. If the loss is expected or foreseeable,
the insured will actively put themselves in insurance contracts to make money.

18. Reinsurance? difference between reinsurance and co insurance?

Practice where an Insurance company (the insurer) transfers a portion of its risks to another (the re-
insurer).
When: high-value property / high possibility of loss
Legal right of the policyholders (insureds) are in no way affected by reinsurance, and the insurer
remains liable to the insureds for insurance policy benefits and claims.

Coinsurance
Coinsurance is a risk-spreading procedure wherein the insured risk is distributed among two or more
insurance companies, each bearing a proportional share of the risk and obligating itself directly to the
common insured.
Difference between the reinsurance and the co-insurance:
+ The reinsurance: the insured just sign 1 contract with 1 insurer, contractual relationship: 1 vs 1
+ Co insurance: the insured signs many contracts with many insurers, contractual relationship: 1
vs 2, 1 vs 3, 1 vs 4,....
 19. Double insurance:
• Situation in which the same risk is insured by two overlapping but independent insurance policies.
Is it possible to obtain double insurance and make claims to all insurers?
• YES! It is lawful to obtain double insurance, and the insured can make claim to both insurers in the
event of a loss.
How much money that insured can receive from all insurers?
• The insured, however, cannot profit (recover more than the loss suffered) from this arrangement
because the insurers are law bound only to share the actual loss in the same proportion they share the
total premium

Khoản 2 Điều 44 Luật kinh doanh bảo hiểm quy định "Trong trường hợp các bên giao kết hợp đồng
bảo hiểm trùng, khi xảy ra sự kiện bảo hiểm, mỗi doanh nghiệp bảo hiểm chỉ chịu trách nhiệm bồi
thường theo tỷ lệ giữa số tiền bảo hiểm đã thỏa thuận trên tổng số tiền bảo hiểm của tất cả các hợp
đồng mà bên mua bảo hiểm đã giao kết. Tổng số tiền bồi thường của các doanh nghiệp bảo hiểm
không vượt quá giá trị thiệt hại thực tế của tài sản."

20. Co-insurance, difference between reinsurance and co insurance? 

A risk spreading procedure. 2 -3 insurance companies share the proportional risk and obligate directly
themselves to the common insured
a + b + c <= 100% giá trị bồi thường
Ex: bảo hiểm xe ô tô có giá trị lớn → người được bảo hiểm không an tâm cho 1 công ti bảo hiểm bồi
thường vì có thể công ti đó không thể bồi thường nổi cho giá trị chiếc xe → áp dụng co-insurance để
nếu xảy ra rủi ro thì có thể đền bù gần bằng giá trị bị tổn thất do rủi ro gây nên
Difference between the reinsurance and the co-insurance:
The reinsurance: the insured just sign 1 contract with 1 insurer, contractual relationship: 1 vs 1
Co insurance: the insured signs many contracts with many insurers, contractual relationship: 1 vs 2, 1
vs 3, 1 vs 4,....
21. Marine insurance? the shipper need to insure his cargo in transportation by sea
Def
Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or
property by which cargo is transferred, acquired, or held between the points of origin and final
destination.

Needs for marine insurance

• Exporters and importers face all the time uncertainties of loss of their goods.
• Insurance: used to protect their financial interests against such risks & actual losses.
• Without adequate insurance and protection of the interests of those with goods in transit,
international trade would be negatively affected.
• Liability of carriers to the goods is very limited

22. Marine risks? different types of risks in marine insurance

• Risk: Probability or threat of a damage, injury, liability, loss, or other negative occurrence,
caused by external or internal vulnerabilities, and which may be neutralized through premeditated
action.
• Marine risks are the risks that occur on the sea/ the risks of the sea/ the risks related to an ocean
voyage”
+ On the sea: collision, fire, Piracy
+ Of the sea:
+ Related to: cargo (heating: hấp hơi or hooking: móc cẩu)
⮚Based on the causes(nguyên nhân gây ra rủi ro)
+ Acts of God: natural disasters-> vile weather, thunderstorm and lightning, tsunami, earthquake,
flood, volcanic eruption, etc.
+ Perils of the sea: ship striking upon the rocks, ship sinking, ship collision, colliding with
iceberg or other objects
+ Risks caused by Social- political actions: war, SRCC (strikes, riots, civil, commotions)
+ Risks caused by particular actions of people: thieves, robbers, pirates,..
+ Risks caused by other sources
=> Based on the practice (căn cứ vào nghiệp vụ bảo hiểm)
1. Insured common perils: the risks that are normal insured in original insurance clauses: (~ rủi ro
thông thường được bảo hiểm)
Main risks:
- Stranding (mắc cạn): a vessel is stranded when, in consequence of some accidental or unusual
occurrence, she comes in contact with the ground or other obstruction, and remains hard and fast upon
it. The vessel needs an external force in order to get off the stranding.
- Sinking (đắm)
- Fire or explosion
- Collision (đâm va)
- Jettison (ném xuống biển): To throw part of the cargo or gear of the vessel overboard to lighten the
load and save the vessel. The owner of the jettisoned goods is entitled to a "general average," i.e., the
loss is shared by the owners of the vessel and the owners of the cargo which was not thrown away:
hàng, cẩu
- Missing (mất tích) :
+ British law: 3 times of ship’s itinerary in normal conditions (no longer than 6 months, no
shorter than 3 months) (WHOLE voyage)
=> Very large losses + All kinds of marine insurance include all main risks

Auxiliary risks: theft, rain, leakage (rò rỉ), breakage, dampness, heating, hooking (móc cẩu), Rusting
(rỉ sét)
2. Relatively Excluded Perils: risks that are not included in standard insurance clauses: War, SRCC
(strikes, riots, civil commotions)
Note: terrorist included
-> Request if you want to buy

3. Absolutely Excluded Perils: NOT insured in any circumstances:

• loss damage or expense attributable to wilful misconduct of the Assured
• ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject-
matter insured -> nature of cargo
• loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the
subject-matter insured -> fault of the insured
• loss damage or expense caused by inherent vice or nature of the subject-matter insured -> nature of
cargo
• loss damage or expense proximately caused by delay, even though the delay be caused by a risk
insured against
+ Popular
+ Storm -> Delay -> Hư thanh long -> 0 đền bù at all (mặc dù bão là đối tượng được bảo đảm),
reason: fruits degrade because of nature of Goods
• loss damage or expense arising from insolvency or financial default of the owners managers,
charterers or operators of the vessel
• loss damage or expense arising from the use of any weapon of war employing atomic or nuclear
fission and/or fusion or other like reaction or radioactive force or matter -> NO catastrophic loss

23. marine insurance? Different types of marine insurance?

Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or
property by which cargo is transferred, acquired, or held between the points of origin and final
destination.

Types of marine insurance:

+ Marine cargo insurance covers export-import goods carriage by sea and related reasonable
costs
+ Hull insurance: covers material loss of or damage to hull and machinery, a portion of costs for
collision liability, and other reasonable costs
+ Protection and indemnity insurance: provide cover to shipowners against third parties liabilities
in connection with the operation of the vessel.
24. Constructive Total Loss. The insured do when there is Constructive Total Loss
-Constructive total loss: is found in the case where the actual loss of the insured goods is
unavoidable (1), or the ship or the consignment has to be abandoned because the cost of recovery
would exceed the value of the ship and the consignment in sound condition upon the arrival of the
port of destination (2)
+ Example for (1): during the carriage of rice, rice has been damp due to the entry of seawater
and become stale. It can be seen that upon arrival at the destination port, the whole lot will be
unusable.
+ Example for (2): the old ship after a heavy collision was in severe damage, but repair is
expensive and exceeds the value of the ship
 When there is Constructive Total Loss, the Insured can issue an NOA (Notice of abandonment) to
give up all of his rights related to the subject-matter insured to the insurer in order to be fully
compensated.
• Requirements:
– Where notice of abandonment is accepted, the abandonment is irrevocable. The acceptance of the
notice conclusively admits liability for the loss and the sufficiency of the notice.
– NOA is unnecessary when the consignments have already reached final destination and are in
actual total loss.

25. General Average Give example? and Procedure to Calculate G/A Contribution
General Average: the losses/ damages caused by special expenses and sacrifices that were
intentionally and reasonably conducted to save the vessel, cargo, and freight from a threat in the
common ocean voyage.
+ There is a general average act when, and only when, any 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.
+ General Average is for the common safety of all of the interests (cargo, vessel, freight)
+ Essential features:
- The loss must be voluntary
- It must be properly made (hàng dễ vứt phải được vứt trước)
 - It must be extraordinary in its nature (due to extreme conditions, not normal
conditions)
- The object of the sacrifice or expenditure must be nothing other or less than the
common safety of ship and cargo
- There must be an imminent danger, and the object must be the attainment of safety
(emergency)
- The loss must be the direct result or reasonably the consequence of the act causing i
Procedure to Calculate G/A Contribution:
+ 1. Identify the Value of GA
+ 2. Identify the Value of Rescue (total contributing value)
+ 3. Rate of GA = value of GA/ value of rescue
+ 4. Contribution
+ 5. Financial Result
26. Notice of Abandonment? the rules of abandonment. Analyze Abandonment of subject
matter insured?
Abandonment: abandon all rights and responsibilities of subject matter insured, transfer SMI to the
insurer
+ NOA: tendered and accepted
+ Insured made it to insurer – transfer responsibility
+ Cannot change (nếu đã chấp nhận rồi thì không thể thay đổi lại)
→ Sau đó insurer mới accept sau khi nhận được NOA từ the insured
→ Sau đó insurer sẽ indemnify full insurance.
27. Rules are applied in solving G/A ? Main content of the rule?

- Rules are applied in solving G/A include:

Rules are applied in solving G/A was first passed at York (Anh) in 1864 – York Rules.

York Rules is modified and amended at Antwerp (Bỉ) in 1924 – York Antwerp Rules.

York-Antwerp Rules were modified and amended in 1950, 1974, 1990, 1994, 2

- YAR 2004 include:

● Notation clause (letters from A to G): definition, characteristics of GA

● Roman numerals clause I to XXIII: which cases are included in GA sacrifices/expenses

● Interpretation clause: GA provisions will be resolved in letter clause unless otherwise stated
by the Supreme Clause and Numeric Clause.

● Supremacy clause: states that in all cases GA will be admitted only when costs and sacrifices
are properly spent.

Amendments of York- Antwerp Rules 2004 compared to previous versions:

- Elimination of principle 2 (expenditures in the common interest): only losses and expenses
incurred for the common safety of the property in transit are included in general average and
expenses for common interest will be canceled
- Rule XI (wages and maintenance of crew and other expenses bearing up for and in a port of
refuge, etc): Wages of the crew members during the ship's stay in the port of refuge shall not
be included in general average, however costs of fuel and spare parts are included in
general average.

– Rule VI: salvage remuneration is not included in GA

– Rule XX: A commission of 2 per cent on GA disbursements, other than the wages and
maintenance of masters, officers and crew and fuel and stores not replaced during the voyage is
not included in GA

– Rule XXI: Interest shall be allowed on expenditure, sacrifices and allowances in GA until three
months after the date of issue of the general average adjustment. Each year the Assembly of the
Committee Maritime International shall decide the rate of interest which shall apply. This rate
shall be used for calculating interest accruing during the following calendar year.

– Rule XXIII: limitation of claims: 1 year after the date upon which GA adjustment was issued
or 6 years from the date of termination of the common maritime adventure. These periods may
be extended if the parties so agree after the termination of the common maritime adventure
 28. Particular Average and General Average? example?
Particular Average: losses of each insured interest individually due to acts of God or Perils of the
sea
+ Insurer’s liability: compensate for both of the losses and reasonable costs caused by a
particular average.
+ Reasonable costs are the cost used for saving cargo or reducing its damaged measurement.
General Average: the losses/ damages caused by special expenses and sacrifices that were
intentionally and reasonably conducted to save the vessel, cargo and unpaid freight from a threat in
the common ocean voyage.
+ There is a general average act when, and only when, any 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.
+ General Average is for the common safety of all of the interests (cargo, vessel, unpaid
freight)

GA PA

Cause Intentional and reasonable action Random (natural disaster, unexpected

accident)

Consequence There is a contribution between athe

particular person personally affected by
parties the damage of their subject matter

Indemnity (bồi
Cargo owners are Depends on the agreement in the insurance
thường) always compensated; contract
Ownership is also dependent
on the condition of the insurance

Location Only in the sea Can occur on sea, river, lake,... associated
with water journey
 29. Coverage and exclusions of ICC 1982/QTC1990 Clause A
a. Risk covered: all risks covered by clause B and C; general average and salvage charges; both
to blame collision clause; auxiliary risks such as theft, rain water, leakage, breakage, rusting,
etc.
b. Exclusion: absolutely excluded risks, loss arising from unseaworthiness and unfitness, war
and SRCC
c. Duration: insurance contract shall last from port of discharge/departure warehouse to final
warehouse or on the expiry of 60 days after completion of discharge oversize of the goods
insured from the vessel at the final port of discharge whichever occurs first.
d. Termination: if the contract of carriage is terminated at a port or place other than the named
port and place, or the transit is terminated before delivery of goods, then the insurance is
terminated too unless notice is given to the insurer.
30. Coverage and exclusions of ICC 1982/QTC1990 Clause B
a. Risk covered: All risk in clause C; earthquake volcano eruption or lightning; washing
overboard; entry of sea, lake or river water into vessel craft hold conveyance container lift van
or place of storage, total loss of any package lost overboard or dropped whilst loading on to or
unloading from the vessel; general average and both to blame collision clause
b. Exclusion: absolutely excluded risks; unseaworthiness and unfitness of the vessel; war and
SRCC
c. Duration: transit clause (Like clause A and C).
→ To elaborate on the concept of departure warehouse and final warehouse
Departure warehouse: the warehouse or place of storage at the place named in the insurance
contract for the commencement of the transit
Final warehouse: the Consignees' or other final warehouse or place of storage at the destination
named in the insurance contract,
Any other warehouse or place of storage, whether prior to or at the destination named in the
contract, which the insured elect to use either for storage other than in the ordinary course of
transit or for allocation or distribution
d. Termination: As clause A (if the contract of carriage is terminated at a port or place other
than the named port and place, or the transit is terminated before delivery of goods, then the
insurance is terminated too unless notice is given to the insurer.)
31. Coverage and exclusions of ICC 1982/QTC1990 Clause C
a. Risks covered:
Loss or damage to the subject matter insured reasonably attributed to fire or explosion;
stranding, grounding, sinking, missing or capsizing; overturning or derailment of land
conveyance; collision; discharge of cargo at port of distress; general average sacrifice and both
to blame clause.
b. Exclusion: Like clause A or B (absolutely excluded risks; unseaworthiness and unfitness of
the vessel; war and SRCC,contraband, wilful misconduct, deviation)
c. Duration: Like clause A or B (insurance contract shall last from port of discharge/departure
warehouse to final warehouse or on the expiry of 60 days after completion of discharge oversize
of the goods insured from the vessel at the final port of discharge whichever occurs first)
d. Termination: Like clause A or B (if the contract of carriage is terminated at a port or place
other than the named port and place, or the transit is terminated before delivery of goods, then
the insurance is terminated too unless notice is given to the insurer.)
32. ICC1982/QTC1990 clause A and B? Coverage of ICC 1982/QTC1990 War Clause
and Strike Clause
2 special insurance conditions including WR - war risk insurance and SRCC - strike risk
insurance. These are 2 conditions of insurance that are excluded in the main insurance conditions and
the insured must buy more if they want to be insured. Specifically:
a) War Insurance (WR) Conditions
Insured risks:
-War; civil war; revolution; rebellion; insurrection, or civil strife arising therefrom, or any hostile act
by or against a belligerent power
-capture seizure, arrest, restraint or detainment, arising out of the foregoing events and their
consequences, or scheme to carry out such activities.
-derelict mines torpedoes bombs or other, derelict weapons of war.
• General average contribution - Compensation only for losses as a direct result of the war (but only
on the water)
• Risks: mines, torpedoes, ... Insurance extends to the case when the insured is still on the barge to
transport to the ship or from the ship to shore. But not to exceed 60 days from the date of discharge
from the ship unless specially agreed.
b) Conditions of strike insurance (SRCC)
- Risks covered:
strikers, locked-out workmen, or persons taking part in labour disturbances, riots, or civil commotions
any terrorist, or any person acting from a political motive.
• General average and salvage costs
- Only compensation for losses that are a direct consequence of the strike
33. “Transit clause” of ICC1982/QTC1990 ? Give example?
Transit Clause “from warehouse to warehouse”

- Stage from port of discharge to final warehouse: insurance policy terminates either:
+ On safely delivery to the final warehouse, or
+ On the expiry of 60 days after completion of discharge
- Departure warehouse: place of storage at the place
named herein for the commencement of the transit
- Final warehouse:
+ Final warehouse owned or managed by the assured, or
+ Store other than in the ordinary course of transit, or
+ Store using for allocation or distribution, or
+ Store named in insurance policy
HĐ bảo hiểm kết hợp tại:
+ Mang tới kho trên HĐ bảo hiểm
+ Kho khác được người BH chỉ định, do người BH sở hữu; Kho bình thường được phân phối của
người Được BH
+ 60 days after completion of discharge
34. 4 Kinds of the insurance contract for cargoes transported by sea
• Voyage Policy
Definition: A voyage policy is that kind of marine insurance policy which is valid for a particular
voyage.
Responsibility of the insurer: always follow the terms from warehouse to warehouse.
Valid for each shipment only
Shown by insurance policy or certificate of insurance
• Floating policy
Definition: Is an insurance policy between a merchant and an insurance company to ensure all
goods in transit within the agreement, until either party cancels the agreement.
Flexibility: the insurance company still compensates in case the insured encounters force majeure
without notifying the insurer about the specific shipment (not yet issued a policy or certificate of
insurance)
Benefits for both parties:
The Insurer: collects the premium during the insurance period
Insured: cheaper insurance fee, still compensated if the ship has been in an accident without notifying
the Insurer
Save time and cost for both parties when negotiating and signing the contract.
• Valued policy
Definition: is a type of contract that, when signed, specifies the insured value or amount of the
insurance policy.
Advantages: easy to calculate insurance premium -> shippers are sure to receive money when a loss
occurs.
Disadvantages: does not reflect the true value of the shipment. If the price fluctuates, the owner of
the goods will lose because the insurance unit will only compensate according to the initial level -> it
should be used in a short journey, for shipments with little price fluctuations in the market.
• Unvalued policy
Definition is a type of contract that, when signed, does not specify the insured amount or the insured
value, but only states the principles to calculate the insured amount or value (eg, based on the
value of goods at the port of destination on the date of arrival or on the date the vessel is registered to
arrive or the value of the goods at the time of loss, at the time of compensation or at the time of
acceptance; calculated according to the CIF value of the shipment)
Applies to goods whose prices are easy to change in the market.
35. Way to issue cargoes under CIF, CFR, FOB Incoterms 2020

FOB: Buyer pays freight, Both parties are not obliged to buy insurance but buyer may arrange
insurance if necessary. The seller must provide the buyer with information that the buyer needs for
obtaining insurance.

CFR: Seller pays freight, same insurance terms with FOB

CIF: Seller pays freight, seller must arrange a minimum level of insurance paid as identified by Clause
(C) of the Institute Cargo Clauses.

● The insurance coverage should be at least a minimum of 110% of the value of the goods on
the sales contract - this is known as “CIF+10%”.

Based on Incoterms 2020

CIF FOB CFR Supposing

Value/ amount 110%*CIF CIF CIF 110% CIF

V(A) (vì expected value ở or CIF tùy mình để
VN không được quá tính
10%) V = 110% (C+F)/(1-
R)
V=(C+F)/(1-R)

Clause (nếu như không C/B/A

có C/B/A
thỏa thuận) hoặc trong đề phải hoặc
ghi trong đề phải ghi
→C
(nông sản: A;
thép, cuộn thép: B)

When/ Where No later than shipment

Port of loading Port
to of loading to
date warehouse warehouse

Warehouse to
warehouse, or from
port of loading to
warehouse
 Currency L/C contract

36. Type of marine hull insurance Subject matter insured of marine hull insurance
Hull insurance: covers material loss of or damage to hull and machinery, a portion of costs for
collision liability, and other reasonable costs.

a. Type of marine hull insurance

Typical hull and machinery claims include

– Total loss of the ship
– Damage to the ship, engines and equipment
– Explosions and fires
– Groundings – damage to the ship, salvage of the ship and possible contribution in general
average
– Collisions – damage sustained to the ship and sometimes also liability towards the other ship
(RDC)
– Striking other objects – damage inflicted to own ship and sometimes also liability towards
the owners of the other object (FFO)

Các loại hợp đồng bảo hiểm thân tàu

● Time Hull Insurance: is the insurance of the hull for a certain period, usually 12 months
or less and must be clearly stated in the contract. The start and end time must also be
specified.
● Hull Disbursement Insurance: is a type of insurance for the costs of a ship in a voyage:
equipment, supplies, advance salaries for crew officers.
● Voyage insurance: is insurance for the ship in a voyage from one port to another (at and
from) or insurance for a round trip (round trip) => used for insurance for a new ship to
be built for export or for a ship to be repaired or sold
● Builder's Risks Insurance: Insurance buyers are shipbuilders, insuring the ship from the
beginning of construction until delivery, not only insuring the physical body of the ship
but also insurance for other issues such as: production interruption insurance, expected
interest insurance, shipbuilders insurance, noise insurance, etc.
● Repairing Risks Insurance: the insurance buyer is the ship owner to insure for the risks
arising during the repair of the ship but these risks are not covered in the insurance
contract. hull term danger
● Repairer's Risks Insurance: the buyer of insurance is the person repairing the ship to
insure for lost equipment.
● Repairing Expenses Insurance: insurance for expenses incurred during ship repair
b. Subject- matter insured:
● Hull and machinery insurance is to protect the shipowner’s investment in the
ship. It is basically a property insurance which covers the ship itself, the
machinery and equipment. The owner will be protected for losses caused by loss
of or damage to the ship and its equipment
● Furthermore, the insurance covers some liabilities, normally collision liability
with another ship (known as RDC – “Running Down Clause”) – and sometimes
also liability for colliding with other objects than another ship (known as FFO -
“Fixed and Floating Objects). (Bảo hiểm 1 phần trách nhiệm: Trách nhiệm do
đâm va, với bảo hiểm thân tàu thông thường chỉ được bảo hiểm một phần (3/4),
phần còn lại (1/4) do bảo hiểm TNDS P&I và phải ở điều kiện bảo hiểm FOD
(miễn tổn thất bộ phận) trở đi mới có bảo hiểm rủi ro đâm va)
● The third part of the insurance is cover for salvage and general average
contributions.

37. Coverage of ITCH1995

1.1 This insurance covers total loss (actual or constructive) of the subject-matter insured
caused by
1.1.1 perils of the seas rivers lakes or other navigable waters
1.1.2 fire, explosion
1.1.3 violent theft by persons from outside the Vessel
1.1.4 jettison
1.1.5 piracy
1.1.6 contact with land conveyance, dock or harbor equipment
or installation
1.1.7 earthquake volcanic eruption or lightning
1.1.8 accidents in loading discharging or shifting cargo or fuel

1.2. This insurance covers total loss (actual or constructive) of the subject-matter insured
caused by
1.2.1 bursting of boilers breakage of shafts or any latent defect in the machinery or hull
1.2.2 negligence of Master Officers Crew or Pilots
1.2.3 negligence of repairers or charterers provided such repairers or charterers are not
an Assured hereunder
1.2.4 barratry of Master Officers or Crew
1.2.5 contact with aircraft, helicopters or similar objects, or objects falling therefrom
provided that such loss or damage has not resulted from want of due diligence by the
Assured, Owners, Managers or Superintendents or any of their onshore management.
38. Responsibilities of the hull insurer in a collision accident? Give example?
39. responsibility of marine cargo insurers in collision accident? Give example?

40. Compare A P&I club with an insurance company.

Protection & Indemnity Insurance (P&I Insurance) developed from the old Hull Clubs in
England in the eighteenth century
• One century later, With the increase of liabilities arising from shipping activities which were
unfortunately excluded by the hull clubs, it was the result of an urgent need for shipowners to
seek some new mechanism to protect their potential liabilities in their business activities
⇒ P&I club came into the world in order to dealt with those things that excluded from
Hull insurance: i.e. third party liabilities and the rest part of collision liabilities
⇒ P&I Club has become one kind of mutual insurance with its own legal capacity
⇒ modern P&I Insurance not only covers the part of collision liabilities which had once
been excluded by the hull insurers but also includes liabilities relating to cargo claims,
liabilities relating to personal injury, oil pollution liabilities, as well as some costs and
expenses arising from the relevant casualties
The main differences between P&I and non-life insurance companies are:
● P&I club insurance is the only type of insurance in which the Member is both the
insurer and the insured. As an insurer when a member contributes to the Association to
 indemnify the claims of other members and an insured when other members contribute
indemnification for his/her losses. It is also mutual support.
● The insurance company's premium is a fixed fee, and the premium paid by a P&I
member to the association is a variable fee. Based on the fact that it is impossible to
predict exactly how much loss will occur in the next year as well as the amount to be
paid to indemnify the member's civil liability in many cases. many years to implement
(depending on the outcome of the court's decision), therefore, to ensure the operation of
the association in the following year, members must pay a provisional fee (or
prepayment fee) on professional year oil. After that, after having complete data on the
expenses of the association in that professional year, the association will proceed to
allocate additional contribution fees to each member.
● Insurance companies seek profit in insurance services, collecting premiums on the basis
that besides being able to indemnify and cover the company's operations, they are also
profitable. P&I Association does not operate on the basis of making a profit from
providing insurance services to its members, the Association collects premiums from
members on a reciprocal basis. The Association operates on the basis of balancing
revenue and expenditure of each professional year. The association never suffered a
loss but also never made a profit. The main income of the Association every year is the
member's advance fee and the profit from investing the Association's idle money in
different forms. In case a certain professional year the association does not spend all the
proceeds from the above sources, this difference is not considered as interest of the
association but is distributed and returned to the members by the association by
reducing the annual fee. later or put into the reserve fund of the association.
● Insurers in the market limit their liability to the amount insured (Suppose the insured is
insured under the value, the insurance company will compensate on the basis of the
insured amount. ). Meanwhile, the liability of the P&I club to its members is unlimited,
except for oil pollution liability (currently $1 billion).
● Another difference between the Association and the insurance companies is that the
Association not only accepts insurance but also serves and helps ship owners.

41. Insurable risks of P&I insurance

● Liability in collision accident: insures for the rest part of collision liabilities that
excluded from Hull insurance
● LIABILITY FOR DAMAGE TO CARGO
● DEATH AND PERSONAL INJURY
– Any person injured on your ship – crew, stevedores, pilots or passengers, for example
may allege that your ship was unsafe. The injured person could decide to sue the ship
and her owners and demand huge sums of money as compensation
– It is necessary for a Master and his senior officers to have a good idea of what his
P&I club’s rules state on the insurance cover for personal injury, illness and loss of life.
 REPATRIATION OF SICK OR INJURED CREW AND HOSPITAL EXPENSES
– P&I insurance also covers a shipowner’s liability to pay for the costs of repatriating
crew members who become sick or are injured on board. The insurance also cover the
crew’s hospital bills and costs of sending replacement personnel to the ship if necessary
● LOSS OF CREW MEMBERS’ PERSONAL EFFECTS
– P&I insurance also covers the owner’s liability for loss of crew belongings in cases of
shipwreck or fire on board.
– The cover only applies to items which are deemed to be reasonable for any crew
member to have with him on board.
– A crew member travelling with unusually expensive items, such as laptop computers,
gold watches etc should make sure that he has such items separately insured.
● STOWAWAYS, REFUGEES AND PERSONS SAVED AT SEA
● POLLUTION
– Oil from your ship which pollutes a harbour, dock or waterway will have to be
cleaned up. Clean-up costs will be charged to the ship and fines may be imposed on the
ship, the Master, and the Chief Engineer. Your ship could be arrested, and the owners
required to establish some form of security acceptable to the port authorities.
● WRECK REMOVAL AND OBSTRUCTION
– The standard insurance shall cover liability and costs arising out of the raising,
removal, destruction or marking of the wreck of the entered vessel, her equipment,
bunkers or cargo lost as a result of a casualty, in so far as the raising and other
operations are compulsory by law, or necessary to avoid or remove a hazard or
obstruction to navigation, or the costs are legally recoverable from the member
● GENERAL AVERAGE CONTRIBUTIONS – CARGO
– The standard insurance shall cover the member’s loss in respect of general average
expenditure and special charges which should be paid by the cargo interest or some
other party to the maritime adventure but which are not legally recoverable solely by
reason of a breach of the contract of carriage Coverage of P&I insurance
● FINES
● Since fines are imposed for breaches of criminal law, they are generally not covered by
insurance. However, P&I clubs do indemnify members for fines imposed in a few very
specific cases.
Rule
• P&I insurance normally provides cover for fines imposed for
• breach of immigration laws
• inaccuracies in cargo documentation
• accidental pollution
• smuggling or infringement of customs laws
• The club only provides cover for fines imposed on the member, not the crew. However, the
club does have a discretion to cover members if they pay a fine imposed on the master or crew
 because they are legally obliged to do so, or because the club accepts that it was reasonable to
do so
42. The rate-making function of insurers
The ratemaking: refers to the pricing of insurance and the calculation of insurance
premium.
● Rate: price per unit of insurance
● Exposure unit: unit of measurement used in insurance pricing:
Premium = Rate * Exposure unit
Total premiums charged must be adequate for paying all claims and expenses during
the policy period.

43. The steps in the underwriting process

Step 1: The application.
The agent considers the application, whether to accept it or not.
Step 2: Considering the borderline and prohibited cases
In case of acceptance. Then the next step is to consider what needs to be accepted and rejected.
Define the borderline and Prohibited of the case.
Step 3: The agent’s report
Step 4: An inspection report
Step 5: Physical inspection
Underwriting starts with the agent
Information for underwriting comes from:
● The application
● The agent's report
● An inspection report
● Physical examination and attending physician's report
● MIB report
After reviewing the information, the underwriter can:
● Accept the application and recommend that the policy be issued
● Accept the application subject to restrictions or modifications
● Reject the applications
Many insurers now use computerized underwriting for certain personal lines of insurance that
can be standardized

44. the sources of information that a risk manager can use to identify loss exposures?
■ Risk analysis questionnaires and checklists: require manager to answer numerous
questions that identify major and minor loss exposures.
■ Physical inspection of company plants and operations can identify major loss exposures.
 ■ Flowcharts that show the flow of production and delivery can reveal production and other
bottlenecks where a loss can have severe financial consequences.
■ Financial statements. Analysis of financial statements can identify the major assets that
must be protected, loss of income exposures, key customers and suppliers, and other important
exposures.
■ Historical loss data

45. What do you mean production in insurance companies?

● Production refers to the sales and marketing activities of insurance.
Agents are often referred to as producers.
Life insurance has an agency or sales department
Property and liability insurers have marketing department
● Marketing of insurance: trend toward professionalism
Agent should be a competent professional with a high degree of technical knowledge
and should place the needs of clients first.

46. the basic objectives in settlement of a claim?

● Verification of a covered loss
● Fair and prompt payment of claims
● Personal assistance to the insured
47. the steps involved in the settlement of a claim?
● The claim process begins with a notice of loss, typically immediately or as soon as
possible after a loss has occurred.
● Next, the claim is investigated
● An adjuster must determine that a covered loss has occurred and determine the amount
of the loss
● The adjuster may require a proof of loss before the claim is paid
● The adjuster decides if the claim should be paid or denied
● Policy provisions address how disputes may be resolved
48. difference between agents and claim adjusters?
An agent adjusters is a representative of an insurance company who sells insurance policies
to individuals or businesses. They typically work on behalf of a specific insurance company
and are responsible for marketing and selling policies, explaining coverage options and
benefits, and helping clients choose the right insurance products for their needs. Agents also
handle policy renewals and may provide customer service and support.
Type of An agent adjusters
● Captive Agent: An agent who works exclusively for one insurance company and sells
only that company's products.
 ● Independent Agent: An agent who represents multiple insurance companies and offers a
range of insurance products to customers.
● Broker: A licensed professional who acts as an intermediary between the customer and
the insurance company, helping customers find the right insurance product for their
needs.
● Direct Writer: An agent who works directly for an insurance company and sells their
products directly to customers, typically through online or phone channels.
A Claim adjuster is responsible for investigating and evaluating insurance claims made by
policyholders. They work for the insurance company and are tasked with determining the
extent and cause of the damage or loss, assessing the value of the claim, and negotiating
settlements with the policyholder. Claim adjusters may work on various types of insurance
claims, including property damage, liability, and personal injury claims.
Major types of claims adjusters include:
● An insurance agent often has authority to settle small first-party claims up to some
limit
● A staff claims representative is usually a salaried employee who will investigate a
claim, determine the amount of loss, and arrange for payment.
● An independent adjuster is an organization or individual that adjusts claims for a fee
● A public adjuster represents the insured and is paid a fee based on the amount of the
claim settlement
49. Alternatives to Traditional Reinsurance?
Some insurers use the capital markets as an alternative to traditional reinsurance
Securitization of risk means that an insurable risk is transferred to the capital markets through
the creation of a financial instrument, such as a catastrophe bond or futures contract
Catastrophe bonds are corporate bonds that permit the issuer of the bond to skip or reduce the
interest payments if a catastrophic loss occurs
Catastrophe bonds are growing in importance and are now considered by many to be a standard
supplement to traditional reinsurance.

50. investments in both life insurance and property and liability insurance are different?
Life insurance
● Pays death benefits to designated beneficiaries when the insured dies. The benefits
pay for funeral expenses, uninsured medical bills, estate taxes, and other expenses.
● Life insurance contracts are long-term; thus, safety of principal is a primary
consideration.
Property and Liability Insurance
● Property insurance indemnifies property owners against the loss or damage of real or
personal property caused by various perils, such as fire, lightning, windstorm, or
tornado.
 ● Liability insurance covers the insured’s legal liability arising out of property damage or
bodily injury to others; legal defense costs are also paid.
● Property and liability insurance is also called property and casualty insurance.
● In contrast to life insurance, property insurance contracts are short-term in nature, and
claim payments can vary widely depending on catastrophic losses, inflation, medical
costs, etc.

51-60. Exercises: soạn ra những công thức liên quan:

Ai có vip thì tải cái này về:

https://www.studocu.com/vn/document/truong-dai-hoc-ngoai-thuong/bao-hiem/bai-tap-bao-
hiem-hang-hoa-van-chuyen-bang-duong-bien/20059084
https://www.studocu.com/vn/document/truong-dai-hoc-ngoai-thuong/bao-hiem/bai-tap-bh-va-
dap-an/26069394
bai-tap-bao-hiem-hang-hoa-van-chuyen-bang-duong-bien.pdf
bai-tap-bh-va-dap-an.pdf
Bài tập 1:

Số tiền bồi thường trên 1 bao: 3.520.000/400.000= 8,8USD/1bao

Tổng số tiền bồi thường của công ty bảo hiểm cho chủ hàng về hàng hóa hỏng:
3000 bao bị rách vỡ do “bao bì mục, một số bị rách” ko nằm trong điều kiện bảo hiểm A → loại
5000 bao bị hư hỏng hoàn toàn, 2000 bao bị giảm giá trị 30% → thuộc điều kiện bảo hiểm A
(5000 + 2000 * 30%) * 8,8 = 49280 USd

Bài tập 2
 a) Số tiền bảo hiểm của lô hàng để đạt quyền lợi tối đa: A =V= [(250+30)*20000)]/(1-0,0005) =
5
b) Số tiền bồi thường của bảo hiểm:
Các trường hợp được bồi thường theo điều kiện A: 100 MT bị ngấm nước mưa giảm giá trị 30%,
20MT bị sét đánh cháy, 50MT bị rơi ra khỏi tàu trong quá trình xếp dở
Các trường hợp không được bồi thường: 30 MT bị chất xếp sai qui cách (unsuitability of preparation),
50 MT bị chủ tàu TỰ Ý bán để lấy tiền sửa chữa tàu (chủ tàu Thiếu thốn về mặt tài chính,wilful
misconduct)
→ (100*0,3+20+50+30)*250 = 25000 USD
Bài tập: A Malaysian Company imported 30,000MT from Vietnam, with price of 350USD/MT FOB
Cat Lai HCMC, Incoterms 2020. Rice was packed with 100kg per package. At port of destination,
some cargoes were lost and damaged, survey report noted as follows:
- 100 p were damaged because of fire
- 150 p were lost during discharging at port of destination
- 200 p were lost because carrier sold them to pay for fuel
- 120 p were wet because of sea water entry
- 200 p were lost because of broken packages, 50% loss
- 50 p were wet because of rain damage
- 100 p were got wet because the hold of vessel was not ventilated.
a. Calculate the insurance amount (A) and insurance premium (clause B ICC 1982 with R=
1%; freight = 20USD/MT). Survey cost was 500 USD
Insurance amount (A) = 350*30000 = 10.500.000 USD
value Insurance V = (C+F)/(1-R)= ( 350*30000 + 20*30000+500)/(1-0,01) ~~ 11,212,626.3 USD
Insurance premium = R . Value Insurance = 0,01 * 11,212,626.3 ~~ 112126.3 USD
b. Calculate the indemnity payment. If cargoes were insured with A ICC 1982?
Numbers of MT that one package carry = 100/1000 = 0,1 MT/package
Case covered by Clause A: 100 p were damaged because of fire, 150 p were lost during discharging
at port of destination, 120 p were wet because of sea water entry, 50 p were wet because of rain
damage,
Case not covered by Clause A: 200 p were lost because carrier sold them to pay for fuel (wilful
misconduct), 200 p were lost because of broken packages (insufficiency packages), 100 p were got
wet because the hold of vessel was not ventilated.

→ (100 + 150 + 120 + 50 )* 350 = 147.000 USD

2. A Japan Company exported 50,000MT to Vietnam, with price of 550USD/MT CFR Kobe port
Japan Incoterms 2020, crude oil. Vessel was missing after leaving port of loading
Calculate the insurance amount and insurance premium (clause B ICC 2009 with R= 1%;
freight = 20USD/MT).
● Insurance amount: 550*50000 = 27.500.000 USD
Insurance value: (550*50000 + 20 * 50000]/(1-0,01)= 28,787,878.79 USD ~~ 28,79 mil USD
● Insurance Premium: 0,01 * …. ~~ 287,879 USD

A vessel with insurance value 10mil transported cargo of shipper A(1mil) and shipper B (2mil), freight
to collect was 300,000USD. During the shipment, the storm came and blew away 200,000USD of
shipper B. The master decided to throw cargo of shipper A (200,000USD) into the sea and speed up
the engine of vessel. At the port of destination, the master declared G/A and asked shipper A and
shipper B pay bond for G/A. Repair cost of engine was 300,000USD.
Calculate the contribution to this GA
Giá trị bảo hiểm của lô hàng shipper A: V= 1 mil / (1-0,01) = 1,01 mil USD
Giá trị bảo hiểm của lô hàng shipper B: V = 2 mil/ 0,99 = 2,02 mil USD
GA:
Cargo of shipper A: 200000 USD
Vessel: 300000 USD
Rate of GA: (0,2 + 0,3) / (10 + 1 + [2-0,2]) = 0,0390625
Contributory Value of each:
Vessel: 0,0390625 x 10 mil = 390625 USD
Cargo A: 1 mil x 0,0390625 = 39062.5 USD
Cargo B : 1.8 mil x 0,0390625= 70312.5 USD