Marine Cargo Insurance

Introduction

Marine Insurance may be effected by either the buyer or seller of goods depending on the terms of the contract of sale. The types of contracts are either FOB, C & F or CIF basis.

The goods can be shipped by either sea freight and/or air freight and/or land transit or combined mode of conveyance.

Types of Contract

FOB (Free on Board)

The seller delivers the goods sold onto the vessel and his interest ceases. The Buyer is responsible for insurance of the goods the moment they are on board the vessel and is liable for the payment of freight charges to the shipping company.

C & F (Cost and Freight)

The seller is responsible for freight charges until the goods are delivered  at the destination. The Buyer would have to effect insurance for the transit if these goods.

CIF (Cost Insurance and Freight)

The seller is responsible for all charges, including the insurance premium and freight charges, until the goods are delivered at the destination, whereupon his contract with the purchaser ceases. The price charged by the seller includes insurance and freight charges.

This class of business should be written cautiously as its profitability largely depends on the claims experience of the proposers from their previous shipments.

Scope of Cover

1) Institute Cargo Clauses (A)
Covers : All Risks of loss or damage to the cargo

2) Institute Cargo Clauses (B)

Covers: 

• Fire or explosion
• Stranding or grounding of vessel
• Overturning or derailment of land conveyance
• Collision or contract of vessel with any external object other than water
• Discharge of cargo at port of distress
• Earthquake, Volcanic Eruption or Lightning
• Jettison or washing overboard
• Entry of sea, lake or river water into vessel, craft, hold, conveyance, etc
• Total loss of any package lost overboard or dropped whilst loading onto, or unloading from vessel or craft.

3) Institute Cargo Clauses (C)

Covers : 

• Fire or explosion
• Stranding or grounding of vessel
• Overturning or derailment of land conveyance
• Collision or contract of vessel with any external object 
• Discharge of cargo at port of distress
• Jettison

4) Institute War Clauses
Marine policies may be extended to cover War risks subject to payment of an additional premium at the current rate prescribed by Institute of London Underwriters. It must be noted that War risks cannot be granted for transit of goods whilst on land. The insurance against War risks attaches only when the goods are loaded on the vessel and terminates on discharge from the vessel at the final port or place of discharge or on expiry of 15days from midnight of the day of arrival of the vessel at the final port of discharge.

5) Institute Strikes Clauses
This extension is also available to cover loss or damage caused by:

• strikes, locked-out workmen or persons taking part in labor disturbances, riots or civil commotion.
• Any terrorist or any person acting from a political motive.

6) Excess/ Deductibles
Excess is applicable to this class  of insurance to take care of the small losses. The amount of excess is different depending on the type of interest insured.

7) Duration
Except for War risks cover, insurance effected under Clauses A,B & C commences from the time the goods leave the godown of the loading port and terminates  either on delivery to the final warehouse at the destination or, on delivery to any other warehouse whether prior to or at the destination named for use as storage or for allocation or distribution and or on the expiry of 60days after completion of discharge of the goods at the final port of discharge whichever shall first occur.

8) Transshipments
This is the act of transferring goods from one vessel to another and if during a marine voyage transshipment occurs for any reason the underwriters are to be advised within  a reasonable period and an additional rate charged.

For further information about this product, please contact our nearest branch and our customer service staff will gladly assist you.