International Insurance

1. Number of coverage

   Nota:

   • 6 standard incurance policies CLausules
2. Misunderstood risks
3. Incoterms rules
4. Vocabulary

   Adjunto:

   • Vocabulary insurance

1. Pre-carriage

   Nota:

   • Portion of the trip in the exporting country
   1. Theft

      Nota:

      • +Pre +On
      1. Pilferage

         Nota:

         • When individuals opportunistically steal cargo (not planned / random).
      2. Organized theft

         Nota:

         • Carefully planned operations by a group of organized criminals at the entire shipment.
      3. System´s theft

         Nota:

         • Perpetrated by someone with access to the shipper´s or carrier´s computers, so the remove evidence of the existance of the cargo.
2. Main carriage

   Nota:

   • The international portion of the voyage.
   1. Mayor
      1. Cargo Movements
      2. Water damage
         1. Rain
         2. Waves
         3. Container sweat

            Nota:

            • The humidity that condenses on the inside walls of a container and on its cargo
      3. Overboard losses
         1. Deck stow collapse

            Nota:

            • Stack of containers placed on the deck that collapses in heavy seas.
         2. Flotsam

            Nota:

            • Cargo that accidentally falls overboard
         3. Jetsam

            Nota:

            • Cargo that was deliberately jettisoned
      4. Jettison

         Nota:

         • The act of throwing cargo overboard to save the ship and the remainder of the cargo. ALl parties on board pay for this loss
      5. Fire
      6. Sinking

         Nota:

         • A ship is damaged, no longer floats, and goes to the bottom of the sea.
      7. Stranding

         Nota:

         • Ship runs into high ground and can no longer move. No direct damage but time and more cargo movements can do that job,
      8. General average
      9. Piracy

         Nota:

         • A violent overtaking of a ship and its crew. Indonesian archipelago Somalia Nigeria Togo Red sea Gulf of Aden
   2. Other
      1. Collision

         Nota:

         • Crush -Ships -Containers -Bridge
      2. Cargo contamnated or affected by other cargo
      3. Hidrance to a shipper
      4. Sowaways

         Nota:

         • A person who hides onboard and travels to the ship destination.
      5. Arrest a ship
      6. Bankruptcy of companies
      7. Civil movements
   3. Air shipments
      1. Cargo movement

         Nota:

         • Quick accelerations and decelerations, no fly around turbulences.
      2. Theft and pilferage
      3. Weather
      4. Takeoff
3. On carriage

   Nota:

   • The portion of the importing country.

Nota:

• A party who would experience a financial loss in case of a peril.

1. Risk Retention

   Nota:

   • The company decides to retain a risk and not insure against it
   1. Large international traders

      Nota:

      • Selfinsure
   2. Exporters or importers that have little exposure

      Nota:

      • Small value, small shipments and a loss would not be substancial financial.
   3. Exporters or importers that have little relative exposure

      Nota:

      • The international transactions represent a very small percentage of their business.
   4. No a clearly evaluation of risks

      Nota:

      • -Ignorance -
2. Risk transfer

   Nota:

   • Transfer risk to an insurance company
   1. Firms with a lot of exposure
   2. Firms witha a relatively high exposure
   3. Firms with little experience
3. Mixed Approach

   Nota:

   • The firm decides to retain some risk and transfer the rest.
   1. Maximum amount of exposure willin to risk, implemented with a deductible.

      Nota:

      • Deductible: the amount that the firm is responsable
   2. Maximum amount of exposure willin to risk and implement a franchise
   3. The firm choses the risks they want to take depending of the type of insurance

1. Purchasing Marine Cargo Insurance
   1. Open Policy

      Nota:

      • Insurance contract with which a form insures every international shipment for a period of time.
   2. Special cargo Policy

      Nota:

      • Insurance policy that covers one shipment.
   3. Insurance certificates
   4. Intermediates
      1. Insurance agent

         Nota:

         • Asist to obtain the most appropriate coverage
      2. Freight forwarder

         Nota:

         • Provide generic coverage for a given shipment
2. Coverages
   1. NON-COVER RISKS
      1. Improper packing
      2. Inherent vice

         Nota:

         • -Rust for iron -Bugs for agricultural or moisture  -Wood split
      3. Ordinary leakage

         Nota:

         • Evaporation, etc.
      4. Unseaworthy vessel
      5. Nuclear war
   2. Institute Marine Cargo Clauses Coverage A

      Nota:

      • All risk of loss or damage to the subject matter insured. Not includes directly: -Strikes and Civil disturbances. -Acts of war. -Seizure by a goverment
   3. All risk coverage

      Nota:

      • Shipments must be under deck -Between two developing countries.
   4. IMCC Coverage B

      Nota:

      • -Good tolerance for bad weather -Not for machines, paper, finished goods, etc.
   5. IMCC Coverage C

      Nota:

      • -Minimum coverage required for CIF and CIP.
   6. With-Average Coverage
   7. Free-of-Particular-Average Coverage
   8. Clauses
      1. Strikes coverage

         Nota:

         • Strikes Riots and Civil Commotions (SR & CC). Covers only the direct physical damage to the shipment. Using an amendment
      2. War and Seizure Coverage

         Nota:

         • Free of Capture and Seizure Coverage FC & S Additional policy called "The War Risks Only" 
      3. Warehouse to warehouse coverage

         Nota:

         • Warehouse-Warehouse (or 15 days after arriving to the destination port, which happens first) Is an extension
      4. Difference in conditions

         Nota:

         • Caluse that allows an importer to complement the coverage offered by the exporter to the coverage level that the importer wants.
      5. General average clause
      6. Constructive Total Loss Coverage Clause
      7. Sue and labor
      8. Inchmaree Clause
3. Other forms
   1. Hull insurance

      Nota:

      • Contract taken by ship owners to cover the risk of damage of the ship.
   2. Protection and indemnity
   3. Airfreight Policy

1. Notification

   Nota:

   • -Writing -Description of damage -Record of seal number and condition.
   1. Surveyor

      Nota:

      • Independent company that investigates damage to shipments on behalf of insurance companies.
2. Protection of damaged cargo

   Nota:

   • Stop unloading the goods and take several photos. Mark the damaged cargo.
   1. Filling the claim
      1. Timing

         Nota:

         • 3 days for Ocean Cargo 7 days for air
      2. Documentation
         1. Insurance policy
         2. All bills of landing from origin to final destination
         3. All invoices
         4. Cargo surveyor´s report
         5. Complete packing list and manifests
         6. Seal numbers report
         7. All documents genereated during the voyage of the cargo
         8. Certificate of Product destroyed or thrown away
         9. Salvage bids and receipts
      3. Carrier liability limits

Nota:

• Oldest insurance market. Edward Lloyd´s coffee house 1688, intermediary between people that want and provide insurance.

Nota:

• -Foreign customer on an open account basis. -Credit terms.

1. Risk involved
   1. Political risk
   2. Commercial risk
2. Insurance policies avaiable
   1. Goverment programs
      1. Ex-Im Bank
      2. Overseas Private Investment Corporation (OPIC)
      3. The small business administration (SBA)
   2. Private insurance company
      1. The Foreign Credit Insurance Association
      2. Euler American Credit Indemnity
      3. Lloyd´s