What Marine Insurance Covers

First, the scope of maritime insurance coverage:

Marine insurance is generally divided into three types: FPA, WPA and all risks. When the insured goods suffer losses, they may be liable for damages in accordance with the provisions of the insurance policy stipulated in the insurance policy.

1, FPA

This insurance is responsible for compensation:

(1) All losses or total loss of the entire cargo caused by bad weather, lightning, tsunami, earthquake, or flood natural disaster during the transit of the insured goods (predicted total loss is the fact that the actual total loss of the insured goods is inevitable, or The cost of recovering, repairing damaged goods, and delivering goods to the original destination exceeds the value of the goods at that destination). When the insured claims for a presumption of total loss, the damaged goods and their rights must be paid to the insurance company. Where the insured goods are transported to or from the seagoing vessel by barges, the cargo contained in each barge can be regarded as an entire batch.

(2) The loss of all or part of the goods caused by stranding, collision, sinking, colliding, collision with drift ice or other objects, and fire accidents or explosion accidents.

(3) In the event that the vehicle has been stranded, hit a reef, sunk, or incinerated in an accident, the cargo was also subjected to some damages caused by natural disasters such as severe weather, thunderstorms, and tsunami before and after the shipment.

(4) All or part of the loss caused by one or several pieces of whole cargo falling into the sea during loading or unloading.

(5) The reasonable expenses paid by the insured against the measures taken to rescue, prevent or reduce the damage to the goods subject to the risk covered by the insured liability, but not exceeding the sum insured of the salvaged goods.

(6) After the ship suffered a shipwreck, the loss caused by the unloading at the port of refuge and the special expenses incurred in unloading, storing and transporting the goods in the port of entry and the port of refuge.

(7) The expense, apportionment, and salvage expenses of general average.

(8) The contract of carriage has a clause of “responsibility for ship collisions”. According to the provisions of the insurance clause, the ship owner shall reimburse the loss of the ship.

2, WPA

In addition to the above-mentioned duties of the above listed FPAs, marine insurance is also responsible for some of the losses caused by the insured items due to adverse weather, lightning, tsunami, earthquakes, and floods.

3, all risks

In addition to the above-mentioned duties of the FPA and WPA listed above, marine insurance is also responsible for all or part of the loss of the insured goods during transit due to external causes.

Second, the marine insurance excluding liability:

Marine Insurance shall not be liable for the following losses:

1. Loss caused by intentional acts or negligence of the insured.

2. Losses caused by the responsibility of the consignor.

3, before the beginning of insurance liability, the quality of the insured goods already exists poor quality or shortfall caused by the loss.

4. Losses or expenses caused by the natural loss, essential defects, characteristics of the insured goods, and the drop in market price and transportation delay.

5. Scope of liability and exclusions stipulated by the company's marine transportation cargo war risk clause and cargo transportation strike insurance clause.

Third, the marine insurance liability from:

1. Maritime insurance bears the responsibility of “warehouse to warehouse” and shall take effect when the insured goods are transported from the warehouse or storage location of the departure place stated in the insurance policy, including the transportation by sea, land, rivers and barges during normal transportation. Within the period until the goods arrive at the final warehouse or storage space of the destination consignee as set out in the insurance policy, or the insured person's other storage space for distribution, distribution or irregular transportation. If it does not arrive at the above warehouse or storage space, it will take 60 days after the insured goods have been unloaded from the seagoing vessel at the final unloading port. If the insured goods are to be transferred to the destination specified in the non-insurance policy within the above-mentioned period of 60 days, they shall be terminated upon the commencement of the transfer of the goods.

2. Any instalment change or termination of the contract of carriage due to delays in transit beyond the control of the insured, bypassing, forced unloading, reloading, reloading, or the carrier’s use of the authority conferred by the contract of carriage, resulting in the shipment of the insured’s cargo to When the non-insurance policy specifies the destination, the insured will notify the insurer of the information obtained in a timely manner, and if the insurance premium is added when necessary, the insurance will continue to be valid. Insurance liability is terminated as follows:

(1) If the insured goods are sold at the destination stated in the non-insurance policy, the insurance liability is up to the time of delivery, but in any event, the insured goods will remain in force for at least 60 days after being completely unloaded from the seagoing vessel at the unloading port. .

(2) If the insured goods continue to be shipped to the original destination or other destination as set out in the insurance policy within the above-mentioned period of 60 days, the insured liability shall still be terminated in accordance with paragraph (1) above.

Fourth, the insured's obligations:

The insured shall handle related matters in accordance with the due obligations set out below. If the insurer's interests are affected due to failure to perform the prescribed obligations, the company has the right to refuse compensation for the relevant losses.

1. When the insured goods arrive at the port of destination specified in the insurance policy, the insured shall promptly take delivery of the goods. If any damages are found to the insured goods, they shall immediately pass the inspections and claims stated on the insurance policy. The agent applies for inspection. If he discovers that the entire insured goods is short or there are obvious signs of damage, the carrier, trustee, or relevant authority (customs, port authority, etc.) should obtain proof of the difference between the goods and the cargo. If the cargo damage is caused by the responsibility of the carrier, trustee or other relevant parties, they should file a claim with them in writing and, if necessary, obtain an extension of time-limited certification.

2. For the goods subject to the dangers covered by the underwriting liability, both the insured and the company can promptly adopt reasonable rescue measures to prevent or reduce the loss of the goods. The adoption of this measure by the insured shall not be deemed as a waiver of abandonment. The company shall not take this measure and shall not be deemed to have accepted the representation of abandonment.

3. In the event of a change of voyage or discovery of omissions or errors in the goods, name or voyage specified in the insurance policy, the insured shall inform the insurer immediately after learning and pay the insurance premium if necessary. This insurance will continue effective.

4. In claiming against the insurer, the following documents must be provided:

Insurance policy originals, bills of lading, invoices, packing lists, pound codes, damage proofs, inspection reports, and claim lists. If it involves the responsibility of a third party, it must also provide relevant correspondence and other necessary documents or documents for recourse against the responsible party.

5. After being informed of the actual responsibility of the "ship collision responsibility" clause in the transportation contract, the insurer shall be promptly notified.

V. Marine insurance claim period:

The time limit for maritime insurance claims shall not exceed two years from the time the insured goods are unloaded from the seagoing vessel at the final unloading port.

1, insurance benefits

The subject covered by the insurer is the object that the insurance must protect. However, the insured (insured) is not covered by the insurance object itself, but is the insured's interest in the object of insurance. This benefit is called insurance interest. If the insurant has no insurance interest in the subject matter of the insurance, the insurance contract is invalid.

International cargo insurance, like other insurance, must be insured by the insured. This insurance interest, in international freight, is reflected in the ownership of the subject matter of the insurance and the risk responsibilities assumed. In the case of transactions based on FOB, FCA, CFR and CPT, the buyer shall bear the risk of the goods passing the ship's rail. Once the goods are lost, the buyer’s interests are lost, so the buyer has an insurance interest.

Therefore, the buyer is insured by the buyer to the insurance company. The insurance contract only takes effect after the goods have crossed the ship's rail. Before the goods passed the ship's rail, the buyer did not have an insurance interest and therefore was not covered by the insurer's insurance coverage for the buyer. In the transactions entered into by CIF and CIP, the insurance is the contractual obligation of the seller. The seller owns the goods and certainly has insurance interest. The seller insures the insurance company and the insurance contract takes effect after the goods are shipped.

2. Risk

The insurance industry divides the risk of maritime cargo transportation into maritime risks and inward risks. Risk is the cause of the loss.

A. Maritime risk

Marine risks include natural disasters and accidents.

Natural disasters, only bad weather, lightning, floods, drifting ice, earthquakes, tsunamis, and other irresistible human disasters, do not refer to disasters caused by general natural forces.

Accidents, major accidents that have significant marine characteristics, including ship stranding, rockfall, sinking, collision, fire, explosion, and missing.

B. Inward risk

External risks refer to various risks other than maritime risks, which are divided into general external risks and special external risks.

General external risk. Refers to theft, crushing, leakage, defilement, moisture and heat, odor, rust, hook loss, short amount, fresh water and rain.

Special external risks mainly refer to risks caused by military, political and administrative decrees, etc., which cause loss of goods. Such as war, strike, delivery, rejection, etc.

3, loss

Loss of cargo on the sea is also known as “Average”, which refers to the loss of goods caused by maritime risks during the maritime transport process. Marine damage also includes the loss of goods during the land transport and inland water transport connected to the sea.

Loss at sea can be divided into total loss and partial loss according to the degree of loss.

A. Total loss

Total loss is also called total loss, which refers to the total loss of the insured goods, the actual total loss and the presumed total loss. The actual total loss refers to the total loss or total deterioration of the goods without any commercial value. Presumed total loss refers to damage incurred after the goods have suffered a risk. Although the actual total loss has not been reached, the actual total loss is unavoidable, or the cost of avoiding the actual total loss and the cost of continuing to transport the goods to the land The sum exceeds the value of insurance. The total loss is presumed to have been verified by the insurer.

B. Partial loss

Losses that are not actual total loss and presumed total loss are partial losses. According to the causes of losses can be divided into general average and individual average.

In the course of ocean transportation, ships, cargoes or other assets encounter common dangers. In order to relieve common dangers, special expenses and special expenses directly caused by reasonable rescue measures are called general average. After a ship’s general average damage has occurred, all sacrifices and expenses within the scope of general average may be calculated through the general average, and the beneficiaries (ie shipowners, cargoes and freight revenues) of the salvaged beneficiaries will share in proportion to the salvage value. Then claim compensation from their respective insurers. The factors involved in common average assessments are relatively complex and are generally adjusted by a special average loss adjuster.

Does not have the nature of the general average, the giant did not achieve the degree of total loss, known as separate average. The loss only relates to the unilateral loss of profits of the ship or cargo owner.

In accordance with the insurance regulations, regardless of the type of insurance that is guaranteed, all losses and general average caused by maritime risks are covered by the insurer. In the case of a presumed total loss, the insured may choose to claim a total loss or a partial loss because the goods have not been completely lost. If a total loss is to be dealt with, the insured shall submit a “notice of abandonment” to the insurer, and the ownership of the remaining subject matter shall be delivered to the insurer, and upon acceptance by the insurer, the insured may be compensated for the total loss.

4, the cost

Risks at sea will also result in expenditures, mainly for rescue costs and salvage expenses. The so-called rescue cost refers to the expenses incurred by the insured person or his agent or the transferee of the insurance policy to take measures in order to avoid or reduce the loss when the insured goods are involved in a disaster within the scope of the coverage. . The so-called salvage expenses are those paid by the salvaged party after the insurer or a third party other than the insured has taken effective salvage measures.

The insurer is responsible for compensation for the above fees, but the total sum does not exceed the amount of insurance.