What Is Cargo Insurance?

Cargo transportation insurance is based on the insurance of various goods during transportation.

Freight insurance

1.Variability of the insured

The insured transported goods may be resold multiple times during the delivery insurance period. Therefore, the final insurance contract guarantees that the beneficiary is not the insured specified in the insurance policy, but the policy holder.

2. Transfer of insurance benefits

When the subject matter of insurance is transferred, the insurance benefits are also transferred.

3. Liquidity of the subject matter of insurance

The subject matter covered by cargo transportation insurance is usually movable property of a commercial nature.

4.The breadth of underwriting risks

The risks covered by cargo transportation insurance include maritime, land and air risks, natural disasters and accident risks, dynamic and static risks, etc.

5. Valuation of underwriting value

There may be differences in the prices of the insured goods at different locations, so the insurance amount of the goods can be determined by the insurance parties according to the agreed insurance value.

6. Transferability of insurance contracts

The insurance contract for cargo transportation insurance usually transfers with the transfer of the subject-matter insured and the benefits of the insurance. It is not necessary to notify the insurer or obtain the consent of the insurer. Insurance policies can be transferred by endorsement or other customary methods.

7.Specificity of insurance benefits

The specificity of cargo transportation is determined by the "no-loss clause" in freight insurance, that is, the insured has no prior knowledge and no concealment. Even before or at the time of the insurance contract, the subject matter of the insurance has been lost, and the underwriting is found afterwards. Risks cause the loss of the subject matter of insurance, and the insurer will also compensate.

8. Strictness of contract termination

Cargo transportation insurance is voyage insurance. The Insurance Law and Maritime Law stipulate that after the cargo transportation insurance starts from the insurance liability, the parties to the contract may not terminate the contract.

In international trade,

maritime

Set according to the nature of the insured goods, the management of the packaging, the ship, and the port.

If there are multiple times throughout the year

Before deciding to insure, you must understand the scope of liability related to each type of insurance. At present, the scope of various insurance clauses provided by the PICC is similar to that provided by similar clauses of international insurance companies. However, for individual foreign investors who insist on using the terms of the London Association (INSTITUTECARGOCLAUSES, ICC), the PICC generally accepts them.

The London Association classifies three basic insurance clauses into ICC (A) (B) (C). The scope of liability of (A) (B) (C) in the ICC clauses is substantially similar to all risks (ALLRISKS), water damage insurance (WITHPARTICULARAVERAGE, APA) and FREEFROMPARTICULARAVERAGE (FPA). Foreigners require the use of ICC or CIC (Marine Cargo Insurance Clause) terms are acceptable, but they must clearly stipulate that they cover any one of these basic risks. At the same time, some appropriate additional risks can be insured according to the product and local specific conditions at the time.

Because the insurance coverage is different, the scope of liability of insurance companies is also different, so the premium rates they charge are different. Since the late 1970s, the means of international trade and its satellite navigation equipment have been continuously improved and modernized. The quality and packaging of China's export goods have also been continuously improved and improved to adapt to ocean transportation. Except for bulk commodities such as grain, feed, fertilizer, petroleum, steel, etc., which are shipped in bulk, the bulk of other groceries exported are basically containerized, which greatly improves safety. However, at present, the insurance clauses of many Chinese import and export companies in export contracts are still independent of time, country and region, etc., or the reality of FCL shipments. risk. This indiscriminate insurance application has increased the cost of insurance premiums and wasted a lot of foreign exchange. For example: For goods transported to Hong Kong and Macau, the rate for Ping An insurance is 0.6 , and the rate for all insurance is 1.0 . However, the voyage by land and water from all sides of Guangdong to Hong Kong Olympics is less than one day. In the event of a typhoon or thunderstorm, the terminal is not loaded and unloaded, and the ship is not suspended. Many foreign trade companies still insure all risks, and some even add soldier insurance. It is really a waste. If the total insured amount for transportation from all ports in Guangdong to Hong Kong and Macao is US $ 10 billion, the insurance premium for Ping An insurance is US $ 800,000, and the insurance premium for all insurance is US $ 1 million. If you purchase Ping An insurance, you can save 400,000 insurance premiums in one year. US dollars.

If the salesmen of various foreign trade companies are insured for export transportation, they can carefully study which types of insurance should be insured for this batch of exports based on different situations, so as to be safe and cost-effective, and it is expected that the country will save hundreds of millions of dollars in insurance premiums each year. expenditure.