Chapter 4: Insurance of International Transport Abstract：This chapter tells mainly insurance cover of marine transport, and some insurance coverage and clause in our country, and some insurance practices. Section1: General knowledge of insurance Section2 ：Insurance coverage Section3 ：Insurance average Section4 ：Institute Cargo Clauses Section5：Transportation insurance under other transportation way Section6: Insurance Practice

Section 1：General knowledge of insurance Basic Principles of Insurance 1、Utmost good faith 2、Insurable interest 3、Principle of indemnity 4、Principle of proximate cause 5、Principle of subrogatio 2019/1/2 国际贸易实务讲义

Section2: Insurance Coverage 一、Perils of the Sea （一）Natural Calamity （二）Fortuitous Accidents 二、Loss and cost of the Sea （一）Loss of the sea 1、Degree of loss: total loss and partial loss Actual total loss Total loss Constructive total loss 2019/1/2 国际贸易实务讲义

. When constructive loss happens, the insured can ask for compensate the partial loss or total loss, but at this moment, he must give the Abandonment notice. 2019/1/2 国际贸易实务讲义

2、Property of loss: General Average and Particular Average （1）The definition of General Average and Particular Average ( 2 ) Conditions of Genaral Average （3）Difference of Genaral Average and Particular Average: reason for loss obligation for loss 2019/1/2 国际贸易实务讲义

（4）、Contribution of General Average Related Parties: Owner, shipper, payer Two principles of General Average Contribution: Firstly, contribution according to the actual loss and extra charges Secondly, contribution according to the article’s value in proportion 2019/1/2 国际贸易实务讲义

Salvage charges is ‘No result, no compensate’ （二）Charges of the sea 1、Sue and labor charges 2、Salvage charges Insurer must compensate Sue and labor charges no matter the result Salvage charges is ‘No result, no compensate’ 三、Extraneous risks and losses (一） General extraneous risks and losses （二） Special extraneous risks and losses 2019/1/2 国际贸易实务讲义

四、Exclusions for insurance company: This insurance does not cover : . 1. Loss or damage caused by the intentional act or fault of the insured. 2. Loss or damage falling under the liability of the consignor. 3. Loss or damage arising from the inferior quality or shortage of the insured goods prior to the attachment of this insurance. 4. Loss or damage arising from normal loss， inherent vice or nature of the insured goods ， loss of market and/or delay in transit and any expenses arising there from.. 5. Risks and liabilities covered and excluded by the ocean marine (cargo) war risks clauses and strike ， riot and civil commotion clauses of this Company. 2019/1/2 国际贸易实务讲义

Section 3：Insurance average in our country According to the China Insurance Clauses, insurance are deviede into basic average and additional average 一、Basic Average （一）FPA: Free from particular average 2019/1/2 国际贸易实务讲义

（二）WPA: With average of with particular average （三）All Risks Comparing the obligations of 3 average 2019/1/2 国际贸易实务讲义

二、Coverage of Insurance responsibility of Basic Average （一）The meaning of Warehouse to Warehouse Clause 2019/1/2 国际贸易实务讲义

三、Additional Average （一）General Additional Average Theft,Pilferage and Non-Delivery:TPND Fresh Water and Rain Damage Risk of Leakage Risk of Shortage Hook Damage Risk of Contamination Risk of Clash and Breakage Risk of Rust Risk of Odour Damage Caused by Heating and Sweating 2019/1/2 国际贸易实务讲义

（二）Particular Additional Average 1、War risk Notice：General additional risk can’t be covered alone，if we have covered All Risks, it needn’t to cover General additional risk. （二）Particular Additional Average 1、War risk Coverage: On water 2019/1/2 国际贸易实务讲义

2、Risk of Strike,Riots and Civil Commotions:SRCC Notice：The commencement and termination of the Risk of Strike is Warehouse to Warehouse; War Risk have be covered, if you want to cover Strike Risk additionally, it mustn’t give more charges. 2019/1/2 国际贸易实务讲义

8、ppending Clause of warehouse fire risk 3、Failure to deliver 4、Import duty risk 5、On deck risk 6、Rejection risk 7、Aflatoxin risk 8、ppending Clause of warehouse fire risk 2019/1/2 国际贸易实务讲义

Section4: Institute Cargo Clauses Institute Cargo Clause，ICC 一、Varieties of Institute Cargo Clauses 1、ICC（A） 2、ICC（B） 3、ICC（C） 4、Institute War Clauses-Cargo 5、Institute Strikes Clauses-Cargo 6、Malicious Damage Clauses Except this，others can be covered alone 2019/1/2 国际贸易实务讲义

二、Insured fisks and exclusions of ICC （一）Insured fisks and exclusions of ICC(A) Same to All Risks in our country: all risks deduct exclusions （二）Insured fisks and exclusions of ICC(B) Same to WA in our country: exclusions Difference between ICC（B）and ICC（A）： （三）Insured fisks and exclusions of ICC(C) Same to FPA in our country: serious accidence Covered the risks of serious accidence 2019/1/2 国际贸易实务讲义

三、Coverage of Risks of ICC （四）Insured risks and exclusions of War Risk （五）Insured risks and exclusions of Srikes Risk （六） Risks and exclusions of Malicious Damage 三、Coverage of Risks of ICC Coverage of Risks: W/W Coverage of War Risks: Water transport 2019/1/2 国际贸易实务讲义

Sections5: Transportation insurance under other transportation way 一、Overland transportation risks Overland transportation risks including: overland transportation risks and air transportation all risks, it adapts W/W clause 二、Air transportation risks Air transportation risks including: air transportation risks and air transportation all risks, it adapts W/W clause 三、Parcel post risks Parcel post risks including: parcel post risks and parcel post all risks, it adapts W/W clause 2019/1/2 国际贸易实务讲义

Section6: Insurance Practice （一） Choice of the insurance average 1、Characters of Cargo 2、Packing of Cargo 3、Line and Port of Transport 4、Season of Transport CIF contract，there is no clear stipulations of insurance average in L/C and contract, and FPA in insurance policy when deliver documents, and the goods are breakages, so A、bank refuse to accept B、the buyer refuse to accept C、FPA and risk of clash and breakage should be covered D、bank accept 2019/1/2 国际贸易实务讲义

（二） Deciding insured amount Export：adding 10% to CIF or CIP Insured value=CIF*(1+I%) CIF=CFR/(1-(1+I%)*i) CIF=CFR/（1-1.1R） Import：basic on the CIF, no addition Insured value=CIF Insured value=FOB（1+average freight rate）/（1-average insurance premium rate） Insured value=CFR/（1- average insurance premium rate ） 2019/1/2 国际贸易实务讲义

（三）Payment of insurance premium insurance premium=insured value*insurance premium rate 2019/1/2 国际贸易实务讲义

二、Insurance Document 1、Insurance Policy 2、Insurance Certificate form of Insurance Policy ： 2、Insurance Certificate 3、Combined Certificate Notice：seldom to use 4、Endorsement Endorsement is a certification that insured need to add or verify the content of insurance document Endorsement is pasted on the insurance policy, and be stamped as a part of insurance policy. 2019/1/2 国际贸易实务讲义

三、Insurance Claim 1、Losing Advice 2、Claiming to carrier Transfer of Insurance Policy：Can be transferred after endorsement as B/L, without agreement from insurer. It can also be transferred effectively although the articles are be damaged. The date of presentation of insurance policy is no later than the transport documents’ 三、Insurance Claim 1、Losing Advice 2、Claiming to carrier 3、Reasonable Saving Measures 4、Documents Preparing Claim 5、Subrogation 2019/1/2 国际贸易实务讲义

四、Counting the reparations CIC: The time of validity of a claim under this insurance shall not exceed a period of two years counting from the time of completion of discharge of the insured goods from the seagoing vessel at the final port of discharge 四、Counting the reparations Notice: All loss are need to compensate or compensating according to the exclusive rate no matter IOP Deductible Franchise PICC use Deductible 2019/1/2 国际贸易实务讲义

五、Insurance Clause of sales contract （一）Under “F” and “E” terms and CFR, CPT contracts, insurance clause should be: Insurance:To be covered by the buyer （二）Under “D” terms contracts, insurance clause should be: Insurance:To be covered by the seller 2019/1/2 国际贸易实务讲义

（三） Under CIF or CIP contracts, insurance clause should be: To be covered by the seller for …% of total invoice value against…, … as per and subject to the relevant ocean marine cargo clauses of the Pepole’s Insurance Company of China,dated… 2019/1/2 国际贸易实务讲义

Summary: This chapter tells mainly that the range of transports, and our country transports cargo insurance risk in our country, and such contents as the clause and transportation insurance practice of cargoes imported and exported ,etc. 2019/1/2 国际贸易实务讲义

Excercises 1、What’s the difference of General Average and Particular Average？ 2、What’s the W/W Clause？How to effect to the commencement and terminate of W/W Clause by the trade terms？ 3、What’s content of the marine insurance？What’s the coverage？ 4、How to choose the insurance coverage？ 5、How to decide the insurance amount？ 2019/1/2 国际贸易实务讲义