Insurance Cargo International Transportation Insurance
Insurance Cargo. When signing the sales contract, both the seller and the buyer should clearly stipulate the relative insurance clauses. The definition of international cargo transportation insurance...
Insurance Cargo Overview
- In international trade,during cargo transportation from the port of shipment to port of destination, there are a lot of risks,which,if they occur,will involve traders in financial losses. Although these risks can not be avoided, they can be transferred to insurance company by covering the goods for various basic risks or insurance clause with the insurer.
- In Insurance Cargo Term, the party who insures others against possible loss or damage and undertakes to make payment in case of loss is called insurer; the party who is insured against possible loss and to whom payment covering the loss will be made is called the insured.
- The contract made between the insurer and the insured is the insurance policy. The amount of money the insurer agrees to cover by insurance against the subject matter is the insured amount(which is usually the amount of CIF value of the consignment plus 10% representing an anticipated profit for the buyer). The sum of money the insured agrees to pay the insurer for an insurance policy is called premium.
Insurance Cargo Clause in the Sales Contract
The following example were adopted from Ocean Marine Cargo Clause of the People's Insurance Company of China.
- Insurance to be effected by the seller for 110% of CIF invoice value against Free Particular Average as per Ocean Marine Cargo Clause of the People's Insurance Company of China.
- The insurance should be effected by the buyer if the contract is concluded on FOB or CFR basis. However, the seller should, immediately after the goods are completely loaded at port of shipment, notifying the buyer of the consignee of the contract number, name of the commodity, quantity, gross weight, measurement, invoice value and number of B/L, name of the vessel, the date of shipment,etc. In case the goods are not insured in time, owing to the seller's failure to give shipping advice timely, any and all consequent losses should be borne by the seller.
- Insurance shall be effected for the amount of seller's CIF invoice value plus 10% against W.P.A. Any additional insurance required by the buyer shall be at his own expense. The seller may insure against War Risk at the buyer's request and at his expense. In case the rate of relevant insurable premium shall be raised between the time of concluding contract and that of shipment, this excess premium shall be on the buyer's account.
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