Definition of Insurance
Insurance is a contract whereby one party,in consideration of a premium paid, undertakes to indemnify the other party against loss from certain perils or risks to which the subject matter insured may be exposed to.
Ocean Marine Cargo Insurance Background:
Ocean Marine Insurance is the oldest form of insurance, probably dating to the Middle Ages.
The organization of Marine Insurance took great steps forward with the formation and development of an insurance market on Lombard Street in London, England and subsequently-- since 1769--Lloyds of London.
Today, Lloyds still plays a prominent role in Marine Insurance.
The first American insurer was Insurance Company of North America (now CNA, one of the companies that writes insurance for David G. Sayles Insurance Services), formed in 1794. CNA has operated continuously since that time, and remains an important market for marine as well as other forms of property and casualty insurance.
Ocean cargo insurance is concerned primarily with international commerce. Basically, anyone who has an insurable interest in a cargo shipment (i.e., anyone who would suffer a loss if the cargo were damaged or destroyed or who would benefit from the safe arrival of the cargo) has a need for an ocean cargo policy. The cargo insurance policy indemnifies the exporter or importer in the event of loss or damage to goods due to a peril insured against while at risk under the policy.
Historically, each voyage of an ocean-going vessel is a joint venture of the ship owner and all the cargo owners. Centuries of tradition, trade practices, maritime and international commercial law affect the interests of the international trader.
Cargo insurance protection is an aid to commercial negotiations. It allows traders to proceed with confidence in the knowledge that each party to the transaction is properly protected. In most cases the cost of marine insurance is nominal when compared with the value of the goods and the freight cost.
The marine cargo insurance policy can be designed to meet the individual needs of the exporter or importer in an international transaction.
Ocean Marine Cargo Insurance
This insurance is classified into the following three Conditions- Free From Particular Average （F. P. A. ）， With Average （W. A. ） and All Risks.
FPA:
1） Total or Constructive Total Loss of the whole consignment hereby insured caused in the course of transit by natural calamities: heavy weather， lightning， tsunami， earthquake and flood. In case a constructive total loss is claimed for， the Insured shall abandon to the Company the damaged goods and all his rights and title pertaining thereto. The goods on each lighter to or from the seagoing vessel shall be deemed a separate risk. Constructive Total Loss refers to the loss where an actual total loss appears to be unavoidable or the cost to be incurred in recovering or reconditioning the goods together with the forwarding cost to the destination named in the Policy would exceed their ＆#118alue on arrival.
2） Total or Partial Loss caused by accidents the carrying conveyance being grounded， stranded， sunk or in collision with floating ice or other objects as fire or explosion.
3） Partial loss of the insured goods attributable to heavy weather， lightning and/or tsunami， where the conveyance has been grounded， stranded， sunk or burnt. irrespective of whether the event or events took place or after such accidents.
4） Partial of total loss consequent on falling of entire package or packages into sea during loading， transshipment or discharge.
5）Reasonable cost incurred by the insured on salvaging the goods or averting or minimizing a loss recoverable under the Policy， provided that such cost shall not exceed the sum insured of the consignment so saved.
6） Losses attributable to discharge of the insured goods at a pert of distress following a sea peril as well as special charges arising from loading， warehousing and forwarding of the goods at an intermediate port of call or refuge.
7） Sacrifice in and Contribution to General Average and Salvage Charges.
8） Such proportion of losses sustained by the shipowners as is to be reimbursed by the Cargo Owner under the Contract of Affreightment Both to Blame Collision clause.
With Average （W. A. ）
Aside from the risks covered under F. P. A. condition as above， this insurance also covers partial losses of the insured goods caused by heavy weather ， lightning， tsunami ， earthquake and/or flood.
All Risks
Aside from the risks covered under the F. P. A. and W. A. conditions as above， this insurance also cover all risks of loss of or damage to the insured goods whether partial or total， arising from external causes in the cause of transit.
General Additional Risks:
1. Theft,Pilferage and Nondelivery-T.P.N.D,
2. Frrsh Water and/or Rain Damage,
3. Risk of Shortage in Weight,
4. Rish of Leakage,
5. Rish of Intermixture and Contamination,
6. Risk of Intermixture and Contamination,
7. Risk of Odour,
8. Sweating and Heating Risk,
9. Hook Damage Risk,
10. Breakage of Packing Risk,
11. Risk of Rust
Special Additional Risks:
1. Faliure to Deliver Risk,
2. import Duty Risk,
3. On Deck Risk,
4. Rejection Risk,
5. Aflatoxin Risk,
6. Seller's Contingent Risk,
7. Fire Risk Extention Clause for Storage of Cargo of Destination Hongkong Inaluding Kowloon,or Macao,
8. Ocean Marine Cargo War Risk
