unit 10 insurance
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Chapter 10Insurance
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Insured/assured is the party who is insuredagainst loss and to whom paymentcovering the loss will be made.
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For insurer, the following
should be referred to: Underwriter, insurance company,broker
Underwriter is a person whomakes insurance contracts forthe goods transported by sea.
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Insurance company is an insurer or organization thatcollects premiums andunderwrites policies.
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Broker in the western countries, theexporter, who wishes to have his
goods insured, does not approach the
insurer directly but instructs aninsurance broker to insure on hisbehalf. The exporter forwards hisinstructions on a form supplied bythe broker and gives the requireddetails on the form.
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The broker who is authorized to place insurancewith certain limits, write the
particulars of the proposed insurance
on a document calledslip
(pink slip.An employee's termination notice.)
and sends the assured a memorandumof the insurance on a duplicate formof instructions.
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Documents of Insurance 1)Insurance Policy
2)Insurance Certificate3)Combined Certificate4)Open Cover/Policy/Floating Policy5)Insurance Declaration6)Endorsement
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Perils and losses
Goods during transportation onsea and in the course of loadingand unloading might meet variouskinds of perils and the goodsmight suffer loss of one kind oranother:
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Kinds of perils : In marine insurance, perils are
generally of two kinds:1.Perils of Sea(1) Natural Calamities:(2) Fortuitous Accidents2.Extraneous Risks
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Kinds of losses : Losses fall into two main classes:
Total Loss and Partial Loss
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1.Total Loss Actual Total Loss where
vessel or cargo are totally andirretrievably lost.Constructive Total Loss CTL
in a case where the ship orthe goods have been abandonedbecause the cost of salvage orrecovery would have been out ofproportion to the value.
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2. Partial Loss
means that the loss to the goodsis only partial.
Particular Average
General Average
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Particular Average
If a particular cargo is damagedby any cause the damage is calledparticular average and the lossmust be borne by the owner ofthis individual consignment.
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General Average
Which is of an entirely differentcharacter. If applies to a lossintentionally insured in the generalinterest of the ship owner and theowners of the various cargoes.This loss is borne by all concernedin proportion.
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*** Average * ** In insurance , the word average
means expenses or loss bydamage of ship or cargo in thecourse of sea transportation dueto natural calamities andaccidents and extraneous risks.
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Insurance Cover/Coverage PICC provides three basic types
of insurance cover 1.Free from Particular Average(F.P.A) 2.With Particular Average (W.P.A)
3.All Risks
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W.P.A Aside from the risks covered under
the F.P.A condition as above, thisinsurance (WPA) also covers partiallosses of the insured goods caused byheavy weather, lighting, earthquakeand/or flood.
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Insurance Covers of AdditionalExtra Risks
Risks that are not covered under thebasic insurance covers F.P.A. andW.P.A. mentioned above may beinsured against under separatedeclaration by the insured.The risks may be
general extra risks special extra risks
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General Extra Risks 1)T.P.N.D. Theft, Pilferage and Non-
Delivery 2)Fresh Water and Rain Damage
Fresh and/or Rain Water Damage 3)Risk of Shortage 4)Risk of Intermixture and ContaminationRisks 5)Risk of Leakage 6)Risk of Clash and Breakage7)Risk of Odor
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General Extra Risks
8)Damage Caused by Sweating andHeating 9)Hook Damage 10)Loss for Damage Caused byBreakage of Packing 11) Risk of Rust
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Special Extra Risks are:
1)Failure to Delivery Risk 2)Import Duty Risk 3)On Desk Risk 4)Rejection Risk 5)Aflatoxin Risk 6)Ocean Marine Cargo War Risks
7)Strikes, Riots and Civil CommotionsRisks.
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In marine cargo insurance, theinsured may take out any one of thethree basic covers, i.e. F.P.A., W.P.A.,
or All Risks, as the case may be. Iffurther protection is needed, he mayfurther insure his goods against oneor several General Extra Risks andSpecial Extra Risks in addition to theF.P.A. or W.A. effected.
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When goods are insured with All Risksclause, they can be further insuredagainst one or several of the SpecialExtra Risks. No extra risks, general orspecial , can be taken out alone. Onlywhen any of the three basic conditionsis covered, can then the general or
special extra risks clauses be effected,if so required.
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premium n. An unusual or high value:
Employers put a premium on honesty and hard work.
adj. Of superior quality or value:
premium gasoline.
at a premium=More valuable than usual, as from scarcity:
Fresh water was at a premium after the reservoir wascontaminated.
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insure the goods against Risks for 110% ofinvoice value with the insurance company. to effect insurance on goods against Risksfor 110% of invoice value with the insurer. insure the good against Risks for invoice
value plus 10%.Insurance is to be covered for 10% aboveinvoice value.Please insure F.P.A.or W.P.A.Please insure against All RisksPlease cover insurance on FPA terms/basis.take out an insurance policy
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coverage
expand coverage extend coverage to News coverage on television
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Franchise
In international trade, a provisionin a marine cargo policy thatpartial losses can be adjusted if
the loss exceeds a certainpercentage of the total value ofthe shipment.
take a franchise deal
d bl
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Deductible Common: If the loss can not exceed the
franchise, no loss will be made forcompensation. Dissimilarities:
Franchise: If the loss exceeds the rate,franchise means the insurance company willmake compensation for all the loss without
deducting the rate.Deductible: If the loss exceeds the rate,deductible means the insurance companywill only make compensation for the partexceeding the rate.
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I.O.P.
Irrespective of Percentage
The insurance company will makecompensation for the loss causedby breakage or shortage withoutcaring I.O.P.
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in the event: as it turned outI was worried about the hotel bill, but inthe event I had enough money to pay.
in the event of: if sth happensIn the event of his death, Sheila will inheritthe money.
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in that event :if that happensYou could be right, and in that eventthey ll have to pay you back.
at all events/in any event: in any case
In any event, the worst that she cando is saying no.
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damages (pl)
money paid or claimed as compensationfor damage, loss or injury. The court awarded $3000 in damages
to the injured man. damage to sth: loss of value,attractiveness, or usefulness, caused
by any event, accident, etc. The accident did a lot of damage tothe car.
l
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Sample Letters 1.Transmittal of bills to insurance
company Patricia Paulson Small Help Insurance Smalltown, OH Re: Homeowners Policy XXX-XXX-
XXX 28 New Street, Smalltown, OH
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Dear Patricia We have you know, the insurance
adjuster visited the next day andcompleted the repairs to our housecaused by the fall of the large oaktree in the front yard. As authorizedus to remove the tree and makerepairs to the roof of the garagewhere limbs fell. He instructed us to
send the bills to you for submissionto the insurance company.
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2
Enclosed please find copies ofreceipts for the tree surgeon andthe carpenter. They total $1,750.
Please let me know if there isanything else I need to do to receivereimbursement for this loss.
Sincerely, John Diamond
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2.Inquiring about insurance coverage abroad Dear Patricia, Re: Most StatesInsurance Policy No . My wife and I will be taking an extended
cruise to Central America in April. We want to find out what sort of medical
coverage our present health insurancepolicy provides while we are abroad thecruise ship and on shore. We will be visitingMexico, Honduras, Belize, and Panama.Does our policy cover visits to the ship sdoctor? What if we need to visit anemergency room on shore?
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2 Wed also like to find out about
available travel insurance that wouldcover the cost of lost deposits if we
were forced to cancel the cruisebecause of illness or family emergency.The cost of the cruise is $3,995.
Sincerely, Harold Diamond
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3.Asking for review of all personalpolicies from new agency
Dear Mr. Harkit: I am considering moving our various
insurance policies to a new agency,and your company has beenrecommended to me.
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2Enclosed are copies of our current
home, car, boat, and life insurancepolices. I would appreciate it if youwould go over all of them and
consider whether any need to beupdated, or are not longer needed. Inaddition, of course, we would like tofind our whether any lower-costoptions are available.
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3
Please give me a call when you havecompleted the review to schedule an
appointment to meet with you andreceive a proposal for new policies. Sincerely,
John Diamond
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corroborate vt. To strengthen orsupport with other evidence; make morecertain.
(, )
A claimed witness of the accidentcorroborated the driver's statement.
Experiments have corroborated her predication.Yes, this is an area in which the factshave largely corroborated the theories.
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grind to crush, pulverize, or reduce to powder byfriction, especially by rubbing between two hard
surfaces:
grind wheat into flour.
Snap To break suddenly with a brisk, sharp,cracking sound.
Suddenly the branch that he was standing onsnapped off.
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Shatter To cause to break or burst suddenlyinto pieces, as with a violent blow.
The glass shattered when I dropped it.
Smash To break (something) into piecessuddenly, noisily, and violently;
"Although the bed was smashed to pieces, theman was miraculously unhurt." ,
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Crack To break without complete separation of
parts; fissure: The mirror cracked.
Split To divide from end to end or along the grainby or as if by a sharp blow.
We split the wood into long thin pieces.
My trousers split when I sat down.