Marine cargo

Saturday, August 29, 2009

"Marine Insurance is said to be Mother of all Insurances”.

In Marine Insurance coverage is provided for goods in transit for both Import and Export and the mode of conveyances on waterways, air and land routes Marine Cargo Insurance is divided mainly into three segments i.e.

Import
The goods are covered from warehouse to warehouse the contract is usually on C&F and CIF basis.

Export
The goods are covered from warehouse to warehouse. The contracts can be CIF and FOB basis.

Inland Transit
The goods are covered from anywhere in Pakistan to anywhere in Pakistan.

The covers with respect to above segments are granted as per London Institute Cargo Clauses A, B & C.

Whereas clause “A” provides widest and most comprehensive cover while clause “C” provides the narrowest scope of cover.

Marine Hull

	Construction Risks
	During the period of the construction of a vessel, it may be insured with an insurance company familiar with handling of such insurance. Due to the fact that a Ship-owner's Yard is essentially a static, non-marine risk, it is possible that basically non-marine insurer will take on the risk of covering a vessel while it is under construction, but generally it is unsatisfactory. Cover will be required for a whole period of construction, which may last for two or three years and as the builder frequently accepts responsibility for the launching of the vessel, its tests, sea-trials and possibly its delivery voyage, builder's risks policies issued in the marine market include full marine cover accordingly. The Institute Clause for Builders' Risks provides a comprehensive form of cover in this respect. Cover can be extended to include War risks but due to the operation of the "Waterborne Agreement"; the vessel is only insured while she is waterborne i.e. after launching.
	Period Of Insurance
	The customary practice is to effect Hull policies for a period of 12 months. The clauses contain, however, the "Continuation Clause" which provides that if at the expiration of the policy the vessel is at sea, or in distress, or at a port of refuge or of Call, the vessel shall, provided previous notice is given to the underwriters, be held covered at a pro-rata monthly premium to her port of destination. This clause provides protection for an insured in the event that vessel was known to be in a damaged condition at sea or feared lost and the policy was nearing termination, naturally making it difficult to obtain renewal of the policy. These days most renewals are arranged well ahead (negotiations frequently commencing two months before expiry) and the need for this clause has, therefore, been reduced.
	Types Of Hull Cover
	Institute Time Clauses — Hulls: total loss, general average and ¾ collision liability (including salvage, salvage charges and sue and labour) Institute Time Clauses — Hulls: total loss only (including salvage, salvage charges and sue and labour) Institute Time Clauses — Hulls: port risks and institute time clauses and hulls: port risks including limited navigation Institute Voyage Clauses — Hulls
	Additional Insurance
	Institute War and Strike Clauses — Hulls — Time Institute Time Clauses — Hulls: disbursements and increased value (total loss only, including excess liabilities) Protection and Indemnity Associations Liabilities in respect of Seamen Liabilities in respect of Passengers Liabilities in respect of Third Parties Liabilities arising from Collisions Liabilities arising from Pollution Liabilities arising from Wreck Removal General Average
	Miscellaneous Marine Risks
	There are quite a number of other marine risks, such as Ship Repairers' Legal Liability and Ship Owners' Liabilities (usually to "on deck" shipments covered by "under deck" bill of lading), Terminal Operators Liability Insurance and Stevedores Liability Insurance. These represent small but important areas within the specialized field of Marine Insurance.

bond

	Historically many companies have approached banks when requiring a bond. A bond is not a policy of insurance but is in effect a form of financial guarantee. It is a guarantee by one party (the surety or guarantor) to another party (the body requesting the bond) that a third party (the company requiring the bond) will meet its contractual obligations. Increasingly insurance companies are providing bonds, with two distinct advantages over the banks: Charges on company assets are not generally requested No reduction upon the company's borrowing facility will be imposed. Before acting as a surety or a guarantor in respect of a bond, an insurance company will usually require the following information: Three years financial audited account for the applicant company Three years consolidated audited account for the ultimate holding / parent company in addition to the above if the company is owned by another company Full details of the circumstances in which the bond is required, including a copy of the bond wording and the bond amount A fee is charged for providing the bond and counter indemnities are generally required from the applicant company and / or its ultimate holding / parent company. In certain circumstances, counter indemnities may also be required from shareholding directors in their personal capacity. A counter indemnity is in many respects a written formalization of an existing common law right. If a company for whom a guarantee is provided fails in its obligation to perform and this gives rise to a call on the bond, surety or a guarantor can claim reimbursement from the company.
	TYPES OF BONDS OFFERED AT EFU
	Bid Bond Performance Guarantee Bond Mobilization Advance Bond Retention Money Bond Excise Bond Supply Bond

aviation

No one will ever know when mankind first tried to fly, but it is clear that man envied the gift given by nature to the animal kingdom, that is, the ability to fly. Very large sums are invested in modern aircraft and their operation. The largest modern airliners cost up to Pak Rupees 14 billion each and may carry over 500 passengers whose collective worth, if compensation for death or injury has to assessed, may run to a further Pak Rupees 50 billion. Even a small private aircraft may be the cause of a mid-air collision with similar financial consequences. The failure of a component manufactured by a small company may result in the loss of a fully loaded airliner. Because such catastrophic loss may arise it is normal for aviation risks to be excluded from many kinds of general insurance policy.

BUYERS OF AVIATION INSURANCE
	Commercial Aircraft Operators Corporate and Business Aircraft Operators Aerial Work and Air Taxi Operators Private Owners and Flying Clubs Air-Craft Manufacturers Owners and Operators of Air-Ports, Hangers Aircrew Passengers Shippers Of Goods By Air Lessors (Banks, Financial Institutions) Hang Gliders Conventional Gliders, Balloons and Hovercraft

	IMPORTANCE
	It has been realized that an increase in speed from 60 m.p.h. to an estimated 1800 m.p.h. in respect of the new supersonic aircraft, together with their ever-increasing costs would reveal the amount of money that air-operators, manufacturers and financial enterprises are investing in the aircraft industry and in civil air transport, and would emphasize the fact that each and every individual company or enterprise could not afford to lose the whole, or even a part, of their capital as a result of accident or misfortune. That is why the idea of spreading the risk by insurance is regarded as inevitable, and why aviation insurance enterprises, as well as new ventures, have been constituted and actively continued.
	TYPES OF COVERS OFFERED
	Aviation Hull All Risks Hull War and Hijacking Spare Engines and Spare All Risk Legal Liability To Passengers Legal Liability To Third Parties Legal Liability To Cargo Legal Liability To Mail Comprehensive General Liability Loss Of License Personal Accident