Chapter 10 Insurance

Insurer/assurer
is the party who insures others against loss or damage and undertakes to make payment in case of loss.

Insured/assured
is the party who is insured against loss and to whom payment covering the loss will be made.

For insurer, the following should be referred to:

Underwriter, insurance company, broker Underwriter is a person who makes insurance contracts for the goods transported by sea.

Insurance company
is an insurer or organization that collects premiums and underwrites policies.

Broker
in the western countries, the exporter, who wishes to have his goods insured, does not approach the insurer directly but instructs an insurance broker to insure on his behalf. The exporter forwards his instructions on a form supplied by the broker and gives the required details on the form.

The broker
who is authorized to place insurance with certain limits, write the particulars of the proposed insurance on a document called slip(pink slip. An employee's termination notice.) and sends the assured a memorandum of the insurance on a duplicate form of instructions.

Documents of Insurance
1)Insurance Policy 2)Insurance Certificate 3)Combined Certificate 4)Open Cover/Policy/Floating Policy 5)Insurance Declaration 6)Endorsement

Perils and losses

Goods during transportation on sea and in the course of loading and unloading might meet various kinds of perils and the goods might suffer loss of one kind or another:

Kinds of perils:
In marine insurance, perils are generally of two kinds: 1.Perils of Sea (1) Natural Calamities: (2) Fortuitous Accidents 2.Extraneous Risks

Kinds of losses:
Losses fall into two main classes:
Total Loss and Partial Loss

1.Total Loss
Actual Total Loss where vessel or cargo are totally and irretrievably lost. Constructive Total Loss CTL in a case where the ship or the goods have been abandoned because the cost of salvage or recovery would have been out of proportion to the value.

2. Partial Loss
means that the loss to the goods is only partial.
Particular Average General Average

Particular Average
If a particular cargo is damaged by any cause the damage is called particular average and the loss must be borne by the owner of this individual consignment.

General Average
Which is of an entirely different character. If applies to a loss intentionally insured in the general interest of the ship owner and the owners of the various cargoes. This loss is borne by all concerned in proportion.

*** Average***
In insurance , the word average means expenses or loss by damage of ship or cargo in the course of sea transportation due to natural calamities and accidents and extraneous risks.

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

W.P.A
Aside from the risks covered under the F.P.A condition as above, this insurance (WPA) also covers partial losses of the insured goods caused by heavy weather, lighting, 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 covers all risks of loss or damage to the insured goods whether partial or total,arising from external causes in the course of transit.

Insurance Covers of Additional Extra Risks

Risks that are not covered under the basic insurance covers F.P.A. and W.P.A. mentioned above may be insured against under separate declaration by the insured. The risks may be general extra risks special extra risks

General Extra Risks

1)T.P.N.D. Theft, Pilferage and NonDelivery 2)Fresh Water and Rain Damage Fresh and/or Rain Water Damage 3)Risk of Shortage 4)Risk of Intermixture and Contamination Risks 5)Risk of Leakage 6)Risk of Clash and Breakage 7)Risk of Odor

General Extra Risks

8)Damage Caused by Sweating and Heating 9)Hook Damage 10)Loss for Damage Caused by Breakage of Packing 11) Risk of Rust

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 Commotions Risks.

 In marine cargo insurance, the insured may take out any one of the three basic covers, i.e. F.P.A., W.P.A., or All Risks, as the case may be. If further protection is needed, he may further insure his goods against one or several General Extra Risks and Special Extra Risks in addition to the F.P.A. or W.A. effected.

 When goods are insured with All Risks

clause, they can be further insured against one or several of the Special Extra Risks. No extra risks, general or special , can be taken out alone. Only

when any of the three basic conditions is covered, can then the general or special extra risks clauses be effected, if so required.

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 was contaminated.

insure the goods against Risks for 110% of invoice value with the insurance company. to effect insurance on goods against Risks for 110% of invoice value with the insurer. insure the good against Risks for invoice value plus 10%. Insurance is to be covered for 10% above invoice value. Please insure F.P.A.or W.P.A. Please insure against All Risks Please cover insurance on FPA terms/basis.

take out an insurance policy

coverage
expand coverage extend coverage to News coverage on television

 In international trade, a provision in a marine cargo policy that partial losses can be adjusted if the loss exceeds a certain percentage of the total value of the shipment. take a franchise deal

Franchise

Deductible
Common: If the loss can not exceed the franchise, no loss will be made for compensation. Dissimilarities: Franchise: If the loss exceeds the rate, franchise means the insurance company will make compensation for all the loss without deducting the rate. Deductible: If the loss exceeds the rate, deductible means the insurance company will only make compensation for the part exceeding the rate.

I.O.P.
Irrespective of Percentage The insurance company will make compensation for the loss caused by breakage or shortage without caring I.O.P.

in the event: as it turned out I was worried about the hotel bill, but in the event I had enough money to pay. in the event of: if sth happens In the event of his death, Sheila will inherit the money.

in that event :if that happens You could be right, and in that event theyll have to pay you back.

at all events/in any event: in any case

In any event, the worst that she can do is saying no.

damages (pl)
money paid or claimed as compensation for 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 to

the car.

Sample Letters
1.Transmittal of bills to insurance company Patricia Paulson Small Help Insurance Smalltown, OH Re: Homeowners Policy XXX-XXXXXX 28 New Street, Smalltown, OH

Dear Patricia We have you know, the insurance adjuster visited the next day and completed the repairs to our house caused by the fall of the large oak tree in the front yard. As authorized us to remove the tree and make repairs to the roof of the garage where limbs fell. He instructed us to send the bills to you for submission to the insurance company.

2
Enclosed please find copies of receipts for the tree surgeon and the carpenter. They total $1,750. Please let me know if there is anything else I need to do to receive reimbursement for this loss. Sincerely, John Diamond

2.Inquiring about insurance coverage abroad Dear Patricia, Re: Most States Insurance 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 insurance policy provides while we are abroad the cruise ship and on shore. We will be visiting Mexico, Honduras, Belize, and Panama. Does our policy cover visits to the ships doctor? What if we need to visit an emergency room on shore?

2
Wed also like to find out about available travel insurance that would cover the cost of lost deposits if we were forced to cancel the cruise because of illness or family emergency. The cost of the cruise is $3,995. Sincerely, Harold Diamond

3.Asking for review of all personal policies from new agency Dear Mr. Harkit: I am considering moving our various insurance policies to a new agency, and your company has been recommended to me.

2
Enclosed are copies of our current home, car, boat, and life insurance polices. I would appreciate it if you would go over all of them and consider whether any need to be updated, or are not longer needed. In addition, of course, we would like to find our whether any lower-cost options are available.

3
Please give me a call when you have completed the review to schedule an appointment to meet with you and receive a proposal for new policies. Sincerely, John Diamond

corroborate vt. To strengthen or support with other evidence; make more certain. ( ,)

A claimed witness of the accident corroborated the driver's statement.

Experiments have corroborated her predication. Yes, this is an area in which the facts have largely corroborated the theories.

grind to crush, pulverize, or reduce to powder by

friction, 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 on snapped off.

Shatter To cause to break or burst suddenly

into pieces, as with a violent blow. The glass shattered when I dropped it. Smash To break (something) into pieces suddenly, noisily, and violently; "Although the bed was smashed to pieces, the man was miraculously unhurt." ,

Crack To break without complete separation of parts; fissure: The mirror cracked. Split To divide from end to end or along the grain by or as if by a sharp blow. We split the wood into long thin pieces. My trousers split when I sat down.