OCEAN CARGO Presented by: Maryann Sokolowski February 25, 2009

What is Ocean Cargo? Simply put – Covers goods being shipped, while in transit overseas and domestically. LIMITS: –Any One Vessel –Any One Vessel On Deck (Subject to an on-deck BOL) –Any One Aircraft –Any One Domestic Transit –Any One Barge –By Parcel Post

Ocean Cargo: The Parties SHIPPER Party who ships the goods Control over packing & arranging goods for shipment Usually the product seller or manufacturer CONSIGNEE Party who receives or purchases the goods Limited control over packing May need documents to release cargo at delivery

Common Terms of Sale Ocean Cargo uses Agreed Value –ACV seldom used because most cargo is brand new, ACV doesn’t reflect costs to destination, and value is always higher at destination FOB: Free on Board –Title changes when cargo passes over ship’s rail FAS: Free Along Side –Title changes when ship receives cargo Buyer assumes the interest and risk of loss at the FOB or FAS point.

Common Terms of Sale, cont. C&F - Cost & Freight –Seller arranges for the freight cost, but does not provide insurance on Buyer’s behalf. CIF - Cost, Insurance & Freight –Seller arranges for freight and purchases insurance for both the Seller and Buyer. –Certificate/Special Policy of Insurance issued and endorsed over to the Buyer. –Certificate allows Buyer to present a claim at destination. Standard Valuation Formula [Invoice value] + [pre-paid freight] + an “advance” Total Used in CIF Terms of Sale Advance ranges from 0% - 25%

Commodities & Packing What is being shipped? Description of Packing (i.e. cardboard boxes, shrink-wrapped and palletized). Are the goods containerized? Door-to- door containers? Sealed containers?

Imports/Exports Policy covers both Imports and Exports –Need to know annual values shipped –% Import or Export –Countries the goods are shipped to/from –Type of shipment (vessel, air, barge, etc.) –Maximum/average value of shipment –Shipping terms Warehouse to warehouse Warehouse to port Port to warehouse

Warehouse to Warehouse Coverage continues in the ordinary course of transit until: 1) Cargo is delivered at the final warehouse/destination OR 2)15 days after completion of unloading of the overseas vessel if the final destination is in the port city Provisions exist for extension of coverage due to delays beyond the insured’s control Notification & payment of additional premium are required What is “Ordinary Course of Transit?” Transit with all of the usual minor delays Covers incidental warehouse storage during normal transit situations DOES NOT refer to circumstances where the insured intentionally halts the shipment for their convenience

Coverage Endorsement Options Domestic Transportation Coverage Warehouse Coverage Exhibition & Processing Sales Representative Samples Strikes, Riots, & Civil Commotions War Risk Flexible Pricing Flexible Reporting

More Information Potential Customers –Wholesalers –Retailers –Manufacturers –Contractors Key Questions to Ask –Do you import or export any goods or raw materials? If so, who is responsible for goods in transit? –Are any of your products manufactured overseas? If so, who is responsible for goods in transit? –Do you sell any of your product overseas?

Final Thoughts Ocean Cargo coverage can round out accounts for your customer. Offering this coverage makes you more valuable to the customer by meeting all of their needs. Keeps other agents out of the picture who are not familiar with the coverage and when it is necessary. QUESTIONS?