Marin cargo insurance
Marin cargo insurance covers the loss or damage of ships, cargo, terminals and any transport or property by which cargo is transferred acquired or held between the points of origin and final destination. It is a contract that an insurer take the responsibility for compensation of the damage which can be occurred from accident in marine business.
It's determined by trade terms that who makes an insurance contract in trade business between the Seller and the Buyer. The trade term decide who would be a risk bearing person for freight between the Seller and the Buyer, and this means a presence of belonging of the insurable interest.

 

The main incoterms

- CIF
Seller : should arrange insurance for all transportation section and pay the premium.
Buyer : Once obtain the B/L, the buyer could ask the claim payment by the endorsed insurance policy.
Insurable interest : would be transferred from seller to buyer when cargo pass the rail of the ship.

- FOB
Seller : should obtain a transit insurance for the risk until cargo pass the rail of the ship at the designated port.
Buyer : should obtain a cargo insurance for possible losses from the time when cargo pass the rail of the ship until arrival at destination.
Insurable interest : would be transferred from seller to buyer when cargo pass the rail of the ship.

- C&F
Seller : bears the cost and freight that are needed to carry cargo to designated destination.
Buyer : should obtain a cargo insurance for possible losses from the time when cargo pass the rail of ship and gets its destination.
Insurable interest : would be transferred from seller to buyer when cargo pass the rail of ship.


CIF

Cost, Insurance and Freight

FOB

Free On Board

C&F (CFR)

Cost and Freight

 

Insured amount

Invoice Amount × Expected profit
* Expected profit : The shipper’s receivable profit by cargo arriving at the destination safely or the importer who is buyer, gets profit expected to be acquired by cargo arriving, and the expected profit is normally the 10% increased amount of the insured amount.
 

Covered risk

Old terms and conditions (Old wording)
1) I.C.C. (FPA : Free From Particular Average)
▶ Total loss : Actual total loss, Constructive total loss
▶ Specified particular average specified casualties :
Total loss of any package of follows; occurrence of S.S.B.(sunk, stranded, burnt), collision, explosion, fire, and damage caused rationally during discharge at a distress port, shipment, discharge, transshipment.
▶ General average : G.A. sacrifice, G.A. expenditure, G.A. contribution
▶ Expense loss : Sue and labour charge, other particular charge(distress harbor expenses such as discharge, storage, transshipment), Salvage charge, other charge.
2) I.C.C. (W.A.: With Average)
▶ Loss secured in ‘I.C.C. (FPA)’
▶ Partial loss by heavy weather : tide, wave, leakage by flood, washing loss, etc.
3) I.C.C. (A/R : All Risks)
Loss by all accidental reasons except below exclusions
Exclusions
▶loss damage or expense attributable to willful misconduct of the assured
▶loss damage or expense caused by inherent vice or nature of the subject-matter insured
▶ordinary wear and tear, ordinary leakage and breakage
▶loss damage or expense by delay of voyage
▶insufficiency or unsuitability of packing
▶other exclusions prescribed in terms and conditions

New terms and conditons (New wording)

Perils Insured Against

A

B

C

loss of damage to the subject-matter insured reasonablely attributable to
▶fire or explosion
▶vessel or craft being stranded grounded sunk or capsized
▶overturning or derailment of land conveyance
▶collision or contact of vessel craft or conveyance with any external
object other than water
▶discharge of cargo at a port of distress
▶earthquake volcanic eruption or lightning






















X

loss of or damage to the subject-matter insured caused by
▶general average sacrifice
▶jettison
▶washing overboard
▶entry of sea lake or river water into vessel craft hold conveyance container liftvan or to, or unloading from vessel or craft.
▶total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft.












X
X

X

all risks of loss of or damage to the subject-matter insured except above
general average, salvage charge (except as provided in perils excepted
or excluded)
both to blame collision



X

X

 

Perils excepted or excluded

A

B

C

wilful misconduct of the assured

ordinary leakage, ordinary loss in weight or volume, or ordinary wear and
tear

insufficiency or unsuitability of packing or preparation
(stowage in a container prior to attachment of the insurance by the assured)

Inherent vice or nature of the subjected-matter insured

delay

insolvency or financial default of the owners managers charterers or
operators of the vessel

deliberate damage or deliberate destruction by the wrongful act of any
person or persons

X

loss damage or expense arising from the use of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

Unseaworthiness of vessel or craft, unfitness of vessel craft conveyance container or liftvan

 
Cargo insurance product

- Specific cargo policy : buy insurance policy every time when a policy holder ships freight.
- Open policy
1) Target : Insured who has cargo insurance premium income more than KRW 20,000,000 during the 1st of January up to 31st of December of prior fiscal year.
2) Merit
- Insured need not to buy insurance premium for each shipping freight but, may buy only one for entire shipping freight during fixed time period.
- could be applied benefit of 5% discount, and influenced discount or additional premium by loss ratio of insurance contract.
- could be secured by further notice in case of miswriting or omission except insured person’s intentional negligence.

 
Starting of responsibility of Insurer

Insurance premium should be paid to company’s bank account before duration begin.
No guarantee for any loss occurred before premium payment to company’s bank account even after the duration begin.