Cargo Insurance Flashcards
Explain benefits of cargo insurance coverage. And why to insure..
Principle of cargo insurance, is “to replace that which has been lost”
Get insurance if object must be exposed to peril in a maritime adventure.
Insurance has a legal relationship to the object.
Cargo insurance covers physical damage to or loss of goods while in transit by land, sea and air.
Define common terms used in cargo insurance policies.
Utmost good faith
Warranty, promise by the insured that statements affecting the validity of the contract are true
Legal liability and errors & omissions insurance, insures FF is fully protected.
Insurance policy is a contract of insurance.
Insurance certificate confirms that insurance is in place.
General average, principal of justice for all.
Inherent vice, physical objects to deteriorate because of fundamental instability of the components.
Describe the process for confirming the insurability of goods.
Verify seals
Examine tape, and look for physical damage
Count and re-weight if possible.
Identify carrier liability and limitations by mode of transport.
Air: 19 SDR/kg
Ocean: 2 SDR/kg
Road: $4.41 CAD
Rail: Freedom of contract/Railway Traffic Liability Ray the/unit
Warehouse/Terminal: Lesser of monetary damage or (100x monthly storage rate/unit
Explain difference between carrier liability and cargo insurance.
Cargo insurance protect goods-in-transit, from lost or damage.
Carrier liability may only cover a dollar amount per lbs./kg.
Purpose of LLE&O insurance?
Form of liability insurance which helps protect advice & service professionals (FF’s) from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in civil lawsuit.
Process of reporting of insurance premiums.
Client send notice of claims
Receive notice
File claim: Sea 3 days of delivery, air 7 days, road 60 days.
Identify types of cargo insurance generally available ( Clauses A,B,C).
Cargo clause A: Everything expect; delay, misconduct by insured, war, strikes, bad packaging, financial default of vessel owner.
Cargo clause B: does not cover, piracy, malicious damage, theft, including what Clause A does not cover.
Cargo clause C: washing overboard, entry of sea, total loss, plus what Clause’s A & B doesn’t cover.
Purpose and preparation of intent to claim.
Gather documentation policy or certificate of insurance.
Copies of bills of lading or airway bill.
Copies of commercial invoice and packing list.
Freight invoice
Photo of damage, if possible
Copies of correspondence between 3rd parties
Describe step by step process of obtaining cargo insurance.
Negotiations directly with insurance broker
General insurance broker
Specialized cargo insurance broker
FF’s can provide insurance to clients through their open policy.
Why insure? Exporter, importer and everyone involved.
Exporter, cost to importer, control stays with exporter.
Importer, no hidden costs in CIF/CIP, coverage meets needs of importer.
Everyone, all carriers limit their liability.
Why should Freight Forwarder insure?
Without insurance, FF, will be expected to help obtain compensation.
Importer & exporters don’t know or understand carrier liability.
FF’s want customers to be competitive, operate successful business and be satisfied.
