Import Export Management Chapter 16

MARINE INSURANCE, SURVEYS &
CLAIMS
Learning objectives:
This chapter will give you an idea of the full
Cargo Marine & Liability Insurance Coverage
and requirements of Surveys of Claims
Processing.
Chapter 16 Import Export Management

CLAIMS
1.1 MARINE INSURANCE
Marine insurance covers the loss or damage of
ships, cargo, terminals and any transport or cargo
by which property is transferred, acquired, or
held between the points of origin and full
destination.
Cargo insurance is a sub-branch of marine
insurance, tough Marine also includes Onshore
and Offshore exposed property; Hull; Marine
Casualty; and Marine Liability.
CLAIMS
There a four types of marine insurance:
Hull Insurance
Cargo Insurance
Freight Insurance
Liability Insurance

CLAIMS
In a contract of marine insurance, the insured
must have insurable interest in the subject
matter insured at the time of the loss.
Insurable interest is not required to be present
at the time of taking the policy.

CLAIMS
Types of Marine Insurance Policies:
Voyage Policy
Time Policy
Mixed Policy
Valued Policy
Open or Un-valued Policy
Floating Policy
Wagering or Honour Policy

CLAIMS
1.2 MARINE CARGO INSURANCE
Marine cargo Insurance is the insurance of
property as it moves from place to place.
The Marine Insurance Act 1906 refers to marine
losses and to marine adventure and marine
perils. Many transits particularly international
ones require two or more types of transport and
the Act makes provisions for them. Marine
Insurance departments insure property conveyed
by aircraft and road and rail vehicles as well.
CLAIMS
Marine cargo insurance is thus a class of
property insurance that insures property while
in transit against loss or damage arising from
perils associated with the navigation of the
sea or air and subsequent land and inland
waterways.
The Act does not specifically mention air
travel or pure land-based transits.

CLAIMS
TYPES OF MARINE CARGO INSURANCE
ALL RISK INSURANCE : Protects the shipper
against physical loss or damage to their cargo
from external causes, subject to policy terms and
conditions.
OPEN CARGO ALL RISKS POLICY : In the course of
International Trade the frequent shipper should
get an OPEN CARGO ALL RISKS POLICY.
DECLARED VALUE INSURANCE
WAREHOUSE-TO-WAREHOUSE PROTECTION OF
CARGO
CLAIMS
1.3 MARINE INSURANCE ACT, 1906( Important
provisions)
S4: A policy without insurable interest is void
S17: A contract of marine insurance is a contract
based upon the utmost good faith
S18 : The proposer must disclose to the insurer,
before the contract is concluded, every material
circumstance which is known to the assured
S50 :A marine policy is assignable
S79 : Right of subrogation

CLAIMS
1.4 VICARIOUS LIABILITY INSURANCE
Vicarious liability:
Vicarious liability is a form of strict secondary
liability that arises under the common law
doctrine of agency-respondeat superior the
responsibility of the superior for the acts of their
subordinate or in a broader sense, the
responsibility of any third party that had the
right, ability or duty to control the activities of a
violator.
CLAIMS
Employers are vicariously liable under the respondeat
superior doctrine, for negligent acts or omissions by
their employees in the course of employment,
If liability for the particular tort requires a state of
mind, then to be liable , the director or senior officer
must have that state of mind and it must be attributed
to the company.
The principle of vicarious liability can also be bypassed
with a legal instrument known as Employers
indemnity. When an employer is successfully sued,
they have the option of suing the tort feasor for an
indemnity to recover the damages back.

CLAIMS
D & O Liability
Directors and Officers Liability is intended to
cover the acts or omissions of those in the
director or officer position.
An entire company should not be held liable
for the statements, actions, failure to act, or
other mistakes that are the responsibility of
an officer or director.

CLAIMS
Professional Liability :
Professional liability is similar to malpractice insurance,
although the coverage may not be as comprehensive as
some malpractice policies in different fields.
The purpose for professional liability insurance is to protect
those seen as professionals or experts in a given field, who
may not be protected by general liability due to their
expertise.
When one is seen as a professional, he is held to a higher
standard and is therefore often considered to hold greater
liability towards his clients. Consequently he needs more
coverage than general liability insurance offers.
Professional liability insurance policies are generally set up
based on claims-made basis, meaning that the policy only
covers claims made during the policy period.
CLAIMS
1.5 PROTECTION AND INDEMNITY CLUB:
Protection and indemnity insurance, commonly
known as P&I is a form of marine insurance
provided by a P&I Club.
A P&I Club is a mutual insurance association that
provides cover for its members who will typically
be ship-owners, ship-operators or demise
charters.
Both P&I Club and marine insurers are governed
by the provisions of the Marine Insurance Act,
1906.
CLAIMS
1.6 SUBGROGATION
Subrogation assuming the legal rights of a
person for whom expenses or a debt has been
paid. Typically an insurance company which
pays its insured client for injuries and losses
then sues the party which the person
contends caused the damages to him/her.

CLAIMS
1.7 SURVEYS
Cargo Survey
Cargo Damage Survey
Cargo Quantity Survey
Load and Stow Survey
Container Survey

CLAIMS
Marine Surveyor
A Marine surveyor or Yacht & Small Craft
Surveyor is a person who conducts inspections,
surveys or examinations of marine vessels to
asses, monitor and report on their condition and
the products on them.
Marine Surveyor also inspect equipment
intended for new or existing vessels to ensure
compliance with various standards or
specifications.
CLAIMS
Cargo Surveyor
A Cargo surveyor is normally appointed by the
Cargo Owner, mostly for Bulk Grain cargo. His
job is to perform the draft survey to
determine the actual cargo loaded on board.
He also confirms that the cargo loading is
performed according to the law and is within
the loadable limits.

CLAIMS
Private Surveyor
A private marine surveyor may be asked to
carry out a wide range of tasks, including
examining ships cargoes or onboard
conditions such as fuel quality, investigating
accidents at sea and preparing accident
reports for insurance purposes and
conducting draught surveys to analyse how
much cargo has been lost or gained.

CLAIMS
1.8 INSURANCE CLAIMS:
The most common problem with marine cargo
insurance claims is that few importers/
exporters know what to do in the event of a
claim. This lack of knowledge often creates
havoc in documenting and processing claims
and often leads to either time-bar total
rejection of the claim.

CLAIMS
Procedure : If pilferage or damage has
occurred, a survey may be required. As a
general rule, amounts under US$500 DO NOT
require a survey.
SUBSTANTIATE THE CLAIM : The consignee
must prove the claim was caused as a result of
transit and occurred during the period of
insurance coverage.

CLAIMS
DOCUMENT THE CLAIM :
Along with noting delivery receipts, it is vital to place
all carriers on notice in the event of a claim. The
following are the time limitations for placing carriers
on notice in the event of a claim.
OCEAN CARRIER : One year from Date of Delivery
AIR CARRIER : Pilferage and Obvious Damage 7 Days,
Hidden Damage 14 days, Non-Delivery 120 days
DOMESTIC CARRIERS : 7 Days from Date of Delivery

CLAIMS
1.9 SUMMARY AND CONCLUSON:
To sum up, it needs to be emphasized that the most
important factor for any Importer-Exporter is the Cargo.
The main objective of any Foreign Trade Transaction is that
the Buyer gets the consignment safely and the Seller gets
the payment Consignments and payments go hand in
hand. It is therefore a big necessity that the Payment
aspect of the Consignment is safeguarded.
Marine Cargo Insurance covering the All Risks clauses on
a Warehouse-to-Warehouse basis is the ultimate
solution. It is imperative that to get the best solutions, the
Fine Print of the Insurance Policy has to be clearly read,
understood and ensured that it covers all aspects of the
Consignment movement and the Payment aspect is fully
safeguarded.

CLAIMS
We have completed Chapter 16.

WITH THIS WE COMPLETE ALL
THE CHAPTERS OF IMPORT
EXPORT MANAGEMENT.
THANK YOU

Import Export Management Chapter 16

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MARINE INSURANCE, SURVEYS &

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

Chapter 16 Import Export Management

We have completed Chapter 16.

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