Dr. Hakan Özcan Claims and Subrogation Group Manager Demir Insurance CMR and Insurance Relations

INSURANCE Insurance: A definition of insurance is: To insure is to transfer the risk one runs with certain activities to another. The transfer and the acceptance of risk is called to insure or even better to close an insurance agreement. The person transferring the risk is the insured party or policyholder. The person or the object that has been insured is the insured person or the insured object.

INSURANCE Agreement: An agreement is an understanding with juridical consequences. An agreement is not obligation but creates an obligation, or in other words obligation arise from an agreement. An obligation leads to liabilities for the parties involved and should be fulfilled under normal circumstances. With an insurance agreement one party has to pay, the other party has to pay out.

INSURANCE Liability: Liability results when one open (legal, natural or a collaboration) holds another liable and brings a charge against the other party Responsibility is made up of: Contract (culpability) Wrongful act Wrongful enrichment Due payment Caretaking

INSURANCE Transport Insurance: Transport always starts with an agreement between the seller and the buyer. A sales agreement is made up of the terms of payment and the delivery terms. Who can be the seller or the buyer Who (buyer or seller) will take care of documents Who(buyer or seller) will take care of the transportation Who(buyer or seller) will take care of the insurance Where (at which point of the transportation) will the risk be transferred to the seller to the buyer. Parties (seller or buyer) can choose to make agreement on this

INSURANCE Transport documents: 1.CMR 2.General Transport Conditions 3.Bill of Lading (B/L) 4.Warsaw Convention 5.International convention relatieve aux transport internationaux ferrodiares (codif)

INSURANCE Types of Transport Insurance: 1. The Separate Post Insurance 2. Own Transport Insurance Policy 3. Turnover Policy 4. Declaration Policy

INSURANCE The interests that are covered within the transport branch: 1.Insuring Casco 2.Insuring expenditure that is made to equip the vehicle 3.Insurance of the freight rate 4.Insurance of the contribution to general average insurance 5.Insurance of various liabilities 6.Incidental insurance

CMR Convention CMR Convention

CMR Road transport operators carrying goods for rewards on International road haulage journeys must comply with the Conversation on the Contract for the International Carriage of Goods by Road (Contrat DeTransport International De Marchandise Par Route) commonly referred to as the CMR Convention. The CMR Convention dates from 19 May 1956 and became effective on 2 July Almost every country in Europe has signed the CMR Convention (In recent years Morocco and Kazakhstan)

CMR Goal CMR The CMR convention defines the carriers liability and the documents to be carried on vehicles engaged in the international movement of goods between different countries of which at least one is a party to the CMR Convention. The convention further defines also some liabilities of the sender and the consignee. Sender The sender is the person with whom the carriers has made an agreement. Bear in mind that this person is not always the same as the person who is stated as sender on the consignment note. Carrier The carrier is the person that actually transports the goods from A to B

CMR Liability Carriers Liability The carrier is liable for the total or partial loss of the goods and for any damage to the goods taking place between the time when he takes over the goods and the time of delivery, as well as for any delay in delivery. The carriers liability for claims resulting from loss of or damage to the goods carried is determined by comparison with a measure known as Special Drawing Rights (SDRs), whereby compensation must not exceed 8.33 SDR per kilogram of gross weight short (gws) Consignee The consignee is the person stated as such on the consignment note and who receives the goods.

CMR What is SDR ? Special Drawing Right: An artificial currency unit based upon several national currencies. SDR serves as the official monetary unit of several international organizations including IMF.

CMR Application The CMR Convention automatically applies to every contract for the international carriage of goods by road in vehicles for reward between different countries of which at least one is a party to the convention, even when the vehicle containing the goods is carried over part of its journey by sea, rail or inland waterway. For the CMR Convention to apply, there must be clear evidence of a Contract for the international journey at no charge would not be covered by CMR as it is outside of a contract of carriage as specified in the Convention.

CMR Application The CMR Conventiotion has other more specific exemptions. Its terms do not apply to: Own-account operations which involve international journeys; Furniture removals; Funeral consignments which are transported abroad; Carriage under an international postal convention; Cabotage journeys (i.e. Internal journeys within a country by a road haulier from another country.)

CMR INSURANCE CMR (Overseas Carriers Liability) Insurance CMR Insurance covers the liabilities born when the transporter is faulty according to CMR convention. Within the conditions and limits in the policy, it covers legal liabilities named by the CMR Convention. (Convention on the contract for the international carriage of goods by road) about the goods and commodities transported by companies operating on international land roads.

CMR INSURANCE CMR (Overseas Carriers Liability) Insurance International land road transporters are liable for the faults of their employees based on CMR convention of the sub-carriers they used for transportation, and their faults while performing their duty. This liability commences at the moment of receiving the goods to be transformed and continues until the delivery completed. The CMR Insurance is not the insurance of the goods in transport but covers the liability when the transporter is faulty according to CMR Convention within the limits determined by the convention.

CMR INSURANCE The Principal Conditions of The Convention The convention applies to every contract for carriage of goods, whether wholly by road or partly by road partly by rail, sea or inland waterway, as long as the goods remain in the original vehicle, on a journey from one country to another, one of which is a contracting party to the convention.

CMR INSURANCE The Principal Conditions of The Convention * The carrier is responsible under the convention for the actions and omissions of his agents and any other persons whose services are used in carrying out the movement. * If the goods are carried under a single contract in different vehicles or are divided owing to their different nature, the carrier or the sender can specify that a separate consignment note should be made out for each vehicle or each load of goods.

CMR The Principal Conditions of The Convention The contract of carriage is confirmed by the making out of a consignment note. The CMR Convention does not give an answer to the question who has to make out the consignment note; it can be done either by sender or by the haulier. The consignment note is made out in three original copies signed by the sender and by the carrier and a normally a fourth copy for the carrier. These signatures may be printed or replaced by the stamps of the sender.

CMR The first copy (red) is handed over to the sender after the carrier has received the goods The second copy (blue) is handed over to the consignee when the goods have reached their destination The third copy (green) for the carrier The fourth copy (black) for the carrier

CMR INSURANCE The Principal Conditions of The Convention * The consignment note must contain certain specified details such as marks and numbers; numbers and kind of packages; descriptions of goods; gross weight; volume; etc. And may also contain additional information to use to the parties to the contract. It must state that the carriage is subject to CMR. * The sender is responsible for all expenses, loss and damage sustained by the carrier as a result of default in completion of consignment note in relation to information supplied by him.

CMR INSURANCE The Principal Conditions of The Convention * On receipt of the goods, the carrier must check the accuracy of the details shown in the consignment note particularly as to the number of packages, the apparent condition of the goods, their packaging and how they are marked. * The sender is liable to the carrier for damage and expenses due to defective packing of the goods unless the defects were known to the carrier when taking over the goods and he indicated this fact by way of a reservation on the note.

CMR INSURANCE The Principal Conditions of The Convention * The sender much attach to the consignment note or make available to the carrier the necessary documents to complete customs formalities. * If the carrier cannot follow the instructions on the consignment note for any reason, he must ask the sender or the consignment note for any reason, he must ask the sender or the consignee, depending on who has the right of disposal, for further instructions.

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