MARINE CARGO INSURANCE Rashmi Lucy Barwa The New India Assurance Co. Ltd.

Cargo Anything that is transported from one place to another is called CARGO If it moves on its own it is not cargo. e.g. Car being sent on truck, railways, ships, aircraft will be cargo and can be covered under marine policy. As long as Cargo is in Transit – Subject Matter of Marine Insurance

Coverages Inland Transit – By Rail/Road Overseas Transit – By Sea ITC (A) All risk, named exclusions ITC (B) Basic cover, ITC (C) Fire only, Overseas Transit – By Sea ICC (A) All risk, named exclusions ICC (B) Named perils, named exclusions ICC (C) Basic maritime perils, named exclusions

Risk Covered - Inland ITC-A: All Risk of loss or damage ITC-B: Physical loss or damage caused by Fire, Lightning, Breakage of Bridges, Collision, derailment or accident ITC-C Physical loss or damage caused by Fire & Lightning

Exclusion Willful misconduct of the insured Ordinary losses Insufficiency or unsuitability of packing Delay Inherent vice or nature of the subject matter insured. War Malicious Damage (ITC-B &C) Strike Riots & Civil Commotion (Add on)

Duration of Coverage As soon as the consignments leaves the seller’s premises, continues during ordinary course of transit and terminates either:- On delivery to consignee’s warehouse at destination named in the policy, or In case of rail only or rail/road, until expiry of 7 days after arrival of railway wagon at destination station or In case of road only, until expiry of 7 days after arrival of vehicle at the destination town Whichever shall first occur.

Risk Covered (by vessel) ICC-A Covers ALL RISKS of loss or damage to the subject matter insured under the policy proximately caused by insured perils, except risks specifically excluded.

Risk Covered Perils ICC-B ICC-C Fire & Explosion Yes Vessel or craft being stranded, grounded, capsized or sunk Overturning or derailment of land conveyance Collision or contact of vessel, craft or conveyance with any external object other than water Entry of sea, lake or river water No

Risk Covered Perils ICC-B ICC-C Discharge of cargo at port of distress Yes Earthquake, volcanic eruption or lightning No General Average Sacrifice Jettison Washing overboard General Average & Salvage charges

Duration of Coverage As soon as the consignments leaves the seller’s premises, continues during ordinary course of transit and terminates either:- On delivery to consignee’s warehouse or other final warehouse at destination named in the policy; or On delivery to any other warehouse prior to at destination which the insured may elect for storage other than in ordinary course of transit or for allocation or distribution; or On expiry of 60 days after discharge over side of the insured goods from the overseas vessel at the final port of discharge Whichever shall first occur.

Exclusion Willful misconduct of the Insured Ordinary (inevitable) loss Improper packing Inherent vice Delay Insolvency/ financial default of carrier, manager, charters or operator of vessel Deliberate damage/ destruction Nuclear weapons exclusion War and SRCC (Add On) Un-seaworthiness and unfitness of vessel / craft

ICC-1982 & ICC-2009 Unseaworthiness & Unfitness Exclusion Clause Exclusion applied if assured / his employees is privy or aware at time of loading. This protects the innocent party. War exclusion including piracy Piracy covered under ICC-A but not under ICC-B & ICC-C Loss damage or expenses due to financial default of the owners managers, charterers or operators of the vessel This exclusion apply only when the party claiming was unaware of the financial circumstances of the carrier Terrorism excluded Still excluded but wider range of threats also excluded (eg. State sponsored terrorism) From time the goods leave the warehouse. Does not cover loading From the time the subject matter insured is first moved in the warehouse…for purpose of immediate loading” Covers loading, but des not cover storage prior to transit. On delivery On completion of unloading Insurance also terminates if the goods remain in the carrying vehicle and the assured / their employees elect to use it for storage.

Types of Policies Specific Voyage Policy Open Policy Open Cover Annual Turnover Policy Duty Insurance Seller’s Contingency Insurance Increased Value Insurance

INCO TERMS Deals with Risk Deals with Transfer of Risk Rights & Duties of Buyers & Sellers Deals with who organises the transport & insurance

INCO TERMS Inco Terms Risk Transfer Exporter arranges insurance ExW At seller’s premises after loading Exporter does not. Buyer to arrange FCA When delivered to carrier named Upto delivery to Carrier FAS When delivered alongside ship Upto Port till placed alongside ship. Loading not covered FOB When loaded on ocean going vessel Upto loading on ocean Going Vessel. Loading Covered. CFR CIF Till Delivery to buyer as per Contract of Carriage e.g. destination port. Min. ICC-C

Parties involved The seller (Consignor) and the buyer (Consignee) Bank The Insurance Company Port Authorities The Carrier (Ship, Air, Road, Rail) Custom Authorities Shipping Agents Clearing and Forwarding Agents (C & F Agents) Stevedores: Contractors appointed by Shipping Company for loading and discharge of Cargo

Claim Documents Original Insurance Policy/Certificate /Declaration, duly discharged or a Letter of Indemnity. Original or signed copy of Invoice with packing list. Signed copy of Bill of Lading / Airway Bill Exchange control copy of Bill of Entry – to check delay and duty payment. Letter of Subrogation Special Power of Attorney Lost overboard certificate / short landing / non delivery certificate / Landed but Missing / Damage Certificate. Registered AD cards or any other evidence – claim notice

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