1. 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

2. 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
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3. 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
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4. .
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.
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5. 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
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6. （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
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7. 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
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8. 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.
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9. 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
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10. （二）WPA: With average of with particular average （三）All Risks
Comparing the obligations of 3 average
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11. 二、Coverage of Insurance responsibility of Basic Average
（一）The meaning of Warehouse to Warehouse Clause
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12. 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
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13. （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
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14. 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.
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15. 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
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16. 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
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17. 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
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18. 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
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19. 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
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20. 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
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21. （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 ）
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22. （三）Payment of insurance premium
insurance premium=insured value*insurance premium rate
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23. 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.
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24. 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
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25. 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
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26. 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
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27. （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…
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28. 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.
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29. 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？
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