1. Trade Risk Guaranty Broker Services LLC
Welcome
Trade Risk Guaranty
Ocean Marine Cargo Insurance: Part I
11/7/2018
Trade Risk Guaranty Broker Services LLC

2. Marine Insurance Basics
Topics Covered Today
Marine Insurance Basics
History
Definition
Types of Coverage
Ways Policies are Purchased
Warranties
Common Warranties
Enhancement Clauses
Standard Enhancements
November 7, 2018
Trade Risk Guaranty Broker Services LLC

3. The History of Cargo Insurance
Dates Back To The 14th century
Dates back to the early Greek and Roman cultures
Developed in Italy and northern Europe
First Marine Insurance Market formed in the late 1680’s in England
Lloyd’s of London
11/7/2018
Trade Risk Guaranty Broker Services LLC

4. Ocean Marine Cargo Insurance
Definition
An arrangement by which a company provides a guarantee of compensation (indemnity) for the specified loss or damage to the insured interest during the insured transit and against the insuring conditions in return for payment of premium
Layman’s Terms: If cargo is lost or damaged during transit, it will be paid for.
November 7, 2018
Trade Risk Guaranty Broker Services LLC

5. Trade Risk Guaranty Broker Services LLC
Types of Coverage
All Risk
Institute Cargo Clause A
Most comprehensive
Covers all, except excluded losses
Exclusions written into policy
Named Perils
Institute Cargo Clause B & C
Restrictive types of coverage
Coverage includes sinking, fire, stranding, heavy weather, and collision
November 7, 2018
Trade Risk Guaranty Broker Services LLC

6. Trade Risk Guaranty Broker Services LLC
Types of Policies
Open Policy
Rated
Based on actual value of goods shipped
Rate decreases as value of goods increases
Flat Annual
Typically for low-volume importers
Rate based on an estimate of goods imported
November 7, 2018
Trade Risk Guaranty Broker Services LLC

7. How Cargo Insurance is Purchased
CIF: Cost, Insurance, and Freight
Cost of insurance is figured into purchasing price
Ownership of goods starts at the foreign port
Shipment by Shipment
Optimal for companies with few shipments
Provided by Freight Forwarders
Annual
Costs only occur once a year
Lower premiums, better coverage, less paperwork
Self-Insurance
Internal fund to cover losses
November 7, 2018
Trade Risk Guaranty Broker Services LLC

8. How Cargo Insurance is Purchased
CIF – Cost, Insurance, and Freight
Ownership of goods starts at foreign port
Seller only required to provide minimum coverage
Figured into selling price
Generally acquired from inferior foreign agencies
Loss/Claims processes issues
11/7/2018
Trade Risk Guaranty Broker Services LLC

9. How Cargo Insurance is Purchased
Obtained for one shipment at a time
Optimal for companies with few shipments
Typically provided by Freight Forwarders via their open policy
FF often marks up cost for this type of coverage
Insurance through Freight Forwarder can be inferior
Always know your coverage, don’t wait until it’s too late to find out you’re not covered for a loss!
11/7/2018
Trade Risk Guaranty Broker Services LLC

10. How Cargo Insurance is Purchased
Annual Coverage
Costs only occur once a year
Lower premiums and less paperwork
More comprehensive coverage, typically
All TRG policies are annual
11/7/2018
Trade Risk Guaranty Broker Services LLC

11. How Cargo Insurance is Purchased – Self-Insurance
Internal insurance fund to cover losses/damages
Generally this means they have no insurance and are willing to “eat” any losses acquired
How would the loss of an entire shipment of goods affect your business?
11/7/2018
Trade Risk Guaranty Broker Services LLC

12. What is a Carrier’s Liability?
Carriers are liable for…
Ocean Carrier - $500 per package or freight unit
An entire shipping container can be considered a package
International Air Carrier - $9.07 per pound or $20 per kilo
Domestic Air Carrier - $0.50 per pound
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Trade Risk Guaranty Broker Services LLC

13. Trade Risk Guaranty Broker Services LLC
THE END
Thanks for watching!
Now you know a bit more about the specifics of Ocean Marine Cargo Insurance
Take this knowledge and apply it to your own importing practices
Feel free to reach out and ask any lingering questions
11/7/2018
Trade Risk Guaranty Broker Services LLC

14. Trade Risk Guaranty Broker Services LLC
Meet the team
Our creative minds
Nick Esposito
Meredith Lambert
Marketing Executive
Marketing Executive
November 7, 2018
Trade Risk Guaranty Broker Services LLC

15. Trade Risk Guaranty Broker Services LLC
Send us a message
Our contact information
On the web
You can contact us at
or Nick & Meredith directly at
twitter.com/trg_bond
facebook.com/trg_bond
linkedin.com/trg_bond
traderiskguaranty.com
Our address
211 East Main Street
Suite C
Bozeman, MT 59715
11/7/2018
Trade Risk Guaranty Broker Services LLC