Cargo Insurance - one of the most effective ways to reduce risks during transport. However, many companies, seeking to save money, refuse to cargo insurance, hoping that "all right". Practice shows that such savings is risky, because in case of damage or loss of cargo losses could reach a very substantial sum. As the CFO is particularly interested in minimizing possible financial losses, it should be clear about on what risks should insure the cargo, and what the nuances in this case should be taken into account.
What to look for when insuring the goods
The decision to conclude the contract of insurance of the goods the company can take at any time prior to its transportation. Terms of insurance depends on the type of cargo, route, etc. The basic document that defines these terms and conditions - a contract with an insurance company. Types of contracts
Each insurance company operates under license from the state, and a special document - the rules of insurance, which are prepared by the company itself. The rules describe the types of insurance contracts entered into by a company, the list of insurable risks of each type of contract, as well as the recovery of damages to the policyholder. Most insurance companies, these documents are similar, because based on the cargo regulations developed by the Institute Clauses (ICC - Institute Cargo Clauses) *. In the carriage of cargo in Russia in the treaties are commonly used terms of the rules of the insurance company, and during transportation to the border crossing - terms ICC, that there are no problems with foreign partners. Types of insurance contracts differ only in the list of insured risks:
* With responsibility for all risks ": the insurer is liable for damages from injury or total loss of all or part of the load, due to any reason, except as otherwise provided in the rules of the insurance company;
* A particular average: on the insurance company are obliged to pay damages from the damage or total loss of all or part of the load that occurred as a result of natural disasters or vehicle collisions, as well as loss of a ship without a trace. Some companies included in this contract and the risk of theft (theft) of all or part of the cargo;
* No liability for damages, except in cases of collapse ": the insurer liable for damages resulting from loss of all or part of the load caused by natural disasters, as well as losses from accidents and the loss of a vehicle without a trace (for example, sacks of flour will wash away from the deck during storm, the insurance will be paid, and if the flour otsyreet, do not.)
In addition to these basic types of contracts the insurance company may contract for insurance related risks such as damage which may arise from the fact that because of political or other events during the transport of goods to the value or change the goods are not delivered at all. However, the premium at the conclusion of such agreements is fairly high.
Example 1
The Company has entered into a contract with the supplier for the purchase of fuel oil with 100-percent down payment for 4 tank of 40 tons. Treaty provided for the delivery of goods within one month after payment, otherwise the money should be returned. Since all the risks associated with the expiry of the purchasing company, she turned to the insurance company with a request to insure the cargo, as well as business risk, ie the risk that the supplier has fulfilled its obligations. Insurance Company insured and entrepreneurial risk, and expected profits of the company. Premium amounted to 2% of the cost of goods **. Such a considerable amount of the insurance premium was due to the fact that in addition to the risk of cargo (0.5%) is taken into account the commercial risk, for which tariffs are usually 1,5-10%. As in the case of losses on the deal, the probability of recovering funds from the perpetrator was a high tariff on commercial risk to be set at 1,5%.
As a result of company-supplier still violated the terms of the contract: instead of the 4 cars to 40 tons each sent two cars to 60 tons. Thus, 40 tons were not delivered. The company referred to the fact that rail services are not provided appropriate packages. Customers have sent a claim the insurer and provider, and the insurance company in turn has expressed its willingness to demand money from the supplier company through the courts. As a result, the money (in advance for this fail-oil) were returned to the company-buyer without trial. In addition, the company (or beneficiary) has received coverage in parts of the contract relating to the forgone expected profits. (According to the insurance company Energogarant.)
Short glossary of terms Insured - person or entity insures its property interest or interest of third parties. Under a contract of insurance policyholder must pay the insurance premium the insurer, to accept the obligations to pay damages. The insurer - a legal entity, created specifically for the insurance activity, as evidenced by the appropriate state license. For the premium the insurer undertakes to compensate the policyholder or beneficiary losses incurred as a result of the loss. Insured event - an event upon the occurrence of which by law or contract the insurer must pay the policyholder or beneficiary indemnity (sum insured). Premium - the amount that the policyholder must pay the insurance company (insurer). Franchise - release the insurer from the obligation to pay damages, not exceeding a certain value. (For example, a contract may indicate that losses will be compensated at an amount ranging from $ 100 - deductible. This means that losses on the lower amount will not be refunded.) Franchise is set in the contract of insurance as a percentage of the amount by which insured the goods, or in monetary terms. Deductible can be conditional and unconditional. In the case of insurance with deductible policyholder if an insured event shall be paid compensation for less deductible. (Thus, if the deductible is $ 100, with damages amounting to U.S. $ 110 reimbursement will equal $ 10) Under a contract with a conditional franchise insurer reimburses the full amount, but only if the damage exceeds the amount of franchise. Borders - application to the insurance contract with an indication of the scope and terms of total number of deliveries that take place within a certain period. Surveyor - an independent expert with appropriate license, or employee of an insurance company, which establishes that conditions of carriage contract terms and written evidence of this. Regression - the right of the insurer to claim a third party, guilty of an insured event, with a view to obtaining compensation for damages. The right to regress arises from the insurer after compensation for their losses insured (beneficiary) within the sum insured. The important clause in a contract
In every insurance contract, as well as the rules of the insurance company provides a list of exceptional cases for which the insurer is not liable. As a rule, the exceptions usually include risks related to:
* With military actions and their consequences;
* With intent or gross negligence of the insured or his representative (violation of the rules of carriage set out in the contract).
The insurer also will not pay for the missing goods if the packaging has no visible violations (eg, loss of belongings out of the container with integral seals )***.
Example 2
LLC "Service-MAP" was carrying cargo across the border under cover of TIR **** (international road carrier), insuring its responsibility in the company Ingosstrakh. Including were insured property interests of the insured in carrying out the transport of goods as a customs carrier. On the road the car was an armed attack, resulting in the cargo was stolen. In connection with the delivery of cargo a central office in Moscow fined the carrier. LLC "Service-MAP" claimed the penalty from the insurer in accordance with the rules of liability insurance trucking to customs authorities *****. Nevertheless, the insurer refused to pay indemnity. The fact is that, in accordance with the rules of insurance Ingosstrakh in the list of customs duties, which are required to reimburse the insurance company, a penalty for nondelivery of goods is not included. The court found the right insurance company. In addition, a claim the Court treated as illegal, because "the insurance risk of liability for violation of customs regulations, such as insurance wrongful interest, by virtue of paragraph 1 of Article 928 of the Civil Code are not allowed "******.
If the company for reasons of principle wants to insure some of the risks pertaining to exceptional cases (for example, the risk of loss of cargo as a result of hostilities, when the transportation route goes through areas of military action), then this should be done in the contract clause, according to which a list of insurance claims will be included these risks. Personal experience
Alexander Andrianov, Director of Finance and Economics of OAO Severstal (Cherepovets) - We conclude cargo insurance to the amount of insurance coverage, which depends on the type of cargo and delivery. For example, under customary marine insurance policy and military strike risks are excluded from standard coverage of insurers. So to broaden the standard cover is necessary to use additional clause, in particular the Institute War Clauses (military reservation. - Remarks. Edition) and Institute Strikes Clauses (strike clause. - Remarks. Edition) covering these risks. Of course, the policy with the more expensive on 0,03-0,05%.
Vera Loginova, CEO of SSF "Capital Insurance Company (Moscow) - Reservations in insurance contracts are used quite often. For example, insurance transport wood or lumber, we are not responsible for the change of qualitative characteristics of the goods, caused by humidity. When insuring the transport of cargo requiring special temperature, the standard contract terms, as a rule, does not include payment of compensation for temperature risks. Include this amount in the contract can be an additional cost. Terms of the contract
Insurance contracts vary in duration. The standard for any insurance company is agreement on a one-time insurance, which is a specific transport and is valid from 30 to 60 days from receipt of money at the expense of the insurer. During this period, the insured shall submit to the insurance company documents to prove the commission of carriage (bill, the contract with the freight forwarder), or justify why it is delayed or not possible, then the insurer will return the money paid on account of premiums, less commissions stipulated in the contract. If this happens, the contract becomes invalid, and the money was not returned.
If transportation uniform shipments are made at regular intervals, the more advantageous to conclude the general contract for insurance of all such traffic (usually it is for one year with possibility of extension). It specifies the name of the goods, mode of transport, insurance rate, payment terms and other details of the transaction. In the master agreement contains a clause sometimes that the insurer may apply the increase or decrease the ratio to the amount of insurance payment, if the conditions of shipment change.
Policyholder to inform the insurer information about each carriage (a form of communication is established by the treaty) on the day of shipment, and the insurer during the day issued the policy to a specific shipment and an invoice for payment of premiums. It is possible, and periodic payment of insurance premium deduction when the money is, for example, once a month. In this case, instead of policies to the contract included the so-called "boarder, which are compiled for each payment. Customers who sign an agreement for a year, the insurance company can provide a discount of up to 30% of the cost of insurance.
Example 3
In case of insurance of electronic equipment, which is transported by road from Moscow to Cherepovets, the contract was made "with responsibility for all risks." The sum insured was 100% of the actual value of the goods specified in a contract - 18 thousand U.S. dollars. Sign agreement with the deductible equal to 0,5% of the sum insured. In this case, the insurance rate was 0,25% of the sum insured, ie $ 45. At the conclusion of the general contract (if such carriage were regular) premium for a single shipment amounted to 31,5 dollars. (According to the insurance company "Rooks"). What determines the amount of insurance premium
The insurance premium to be paid the insurance company depends mainly on the type of cargo, route and mode of transportation. The base rate for calculating the insurance premium - the cost of the goods specified in the contract, invoice or price list manufacturer. Reference
Prices manufacturing plant is used most often for an insurance contract for the import of goods when the value of the goods in the accompanying documents clearly too low to reduce customs duties. In such cases, you can insure the shipment for the amount above specified in the accompanying documents (ie, its real value), adding to the sum insured costs that increase the value of the goods, such as the cost of delivery of goods, hiring of freight forwarding companies and customs clearance. In addition, you can insure business risks and profits.
The insurer takes into account all the possible risks to which the goods being in transit. It is believed that the more trans-shipment will be on the road (that is, the more time the cargo is transshipped from one vehicle to another), the higher the risk and therefore the cost of insurance. Therefore, in order to minimize the cost of insurance, the insurer must submit documents proving that the goods will be safe and the risk of the insured event is small. The documents should be pointed out that the product quality packaged securely guarded and transported to an appropriate vehicle (eg, for transportation of flowers need a special refrigerator). In order to assess more accurately the safe transport of cargo insurer may require the involvement of surveyors. Personal experience
Vera Loginova - If the transport cargo is transshipped from one vehicle to another, then to determine the insured amount, we can attract third party. Here is an example situation where frozen fish (8 full refrigerators, packaging - sacks) are transferred from ship to rail wagons. Loading was carried out within a few days, and at night time the goods were under the protection of employees of the port. This could lead to the loss of the goods and, consequently, change its value. Therefore, for greater safety of the goods we brought surveyors who conducted the autopsy control packing and weighing. Of course, the cost of insurance rose, as the insurance company any additional overhead costs associated with the assessment of cargo in transit.
Reduce the amount of insurance can be by the conclusion of the franchise agreement. Use a franchise makes sense if the policyholder thinks that collecting evidence of receipt of minor damage would cost more than the amount of compensation (that is, with minor damages to receive compensation has no meaning). This condition is often used, for example, insurance coverage glass (small losses will in any case, but to prove they are often not profitable).
In order to reduce the size of the insurance premium may also insurance for an amount less than the real value of the insured cargo. In this case the premium also decreases, but the insurance event reimbursement will be reduced proportional to the ratio of the sum insured to the value of the goods. How to get insurance
To the insurance company made the insurance payments, to prove that this was an accident, that is, conditions of the contract of insurance of the goods had not been violated and the goods actually hurt. The general procedure in such cases is roughly the same. The attack must notify by phone, fax, telex or e-mail insurer. Within two or three days after the insured event must be submitted to the insurance company a written statement of the requirement to pay the insurance indemnity.
What to look for when insuring the goods
The decision to conclude the contract of insurance of the goods the company can take at any time prior to its transportation. Terms of insurance depends on the type of cargo, route, etc. The basic document that defines these terms and conditions - a contract with an insurance company. Types of contracts
Each insurance company operates under license from the state, and a special document - the rules of insurance, which are prepared by the company itself. The rules describe the types of insurance contracts entered into by a company, the list of insurable risks of each type of contract, as well as the recovery of damages to the policyholder. Most insurance companies, these documents are similar, because based on the cargo regulations developed by the Institute Clauses (ICC - Institute Cargo Clauses) *. In the carriage of cargo in Russia in the treaties are commonly used terms of the rules of the insurance company, and during transportation to the border crossing - terms ICC, that there are no problems with foreign partners. Types of insurance contracts differ only in the list of insured risks:
* With responsibility for all risks ": the insurer is liable for damages from injury or total loss of all or part of the load, due to any reason, except as otherwise provided in the rules of the insurance company;
* A particular average: on the insurance company are obliged to pay damages from the damage or total loss of all or part of the load that occurred as a result of natural disasters or vehicle collisions, as well as loss of a ship without a trace. Some companies included in this contract and the risk of theft (theft) of all or part of the cargo;
* No liability for damages, except in cases of collapse ": the insurer liable for damages resulting from loss of all or part of the load caused by natural disasters, as well as losses from accidents and the loss of a vehicle without a trace (for example, sacks of flour will wash away from the deck during storm, the insurance will be paid, and if the flour otsyreet, do not.)
In addition to these basic types of contracts the insurance company may contract for insurance related risks such as damage which may arise from the fact that because of political or other events during the transport of goods to the value or change the goods are not delivered at all. However, the premium at the conclusion of such agreements is fairly high.
Example 1
The Company has entered into a contract with the supplier for the purchase of fuel oil with 100-percent down payment for 4 tank of 40 tons. Treaty provided for the delivery of goods within one month after payment, otherwise the money should be returned. Since all the risks associated with the expiry of the purchasing company, she turned to the insurance company with a request to insure the cargo, as well as business risk, ie the risk that the supplier has fulfilled its obligations. Insurance Company insured and entrepreneurial risk, and expected profits of the company. Premium amounted to 2% of the cost of goods **. Such a considerable amount of the insurance premium was due to the fact that in addition to the risk of cargo (0.5%) is taken into account the commercial risk, for which tariffs are usually 1,5-10%. As in the case of losses on the deal, the probability of recovering funds from the perpetrator was a high tariff on commercial risk to be set at 1,5%.
As a result of company-supplier still violated the terms of the contract: instead of the 4 cars to 40 tons each sent two cars to 60 tons. Thus, 40 tons were not delivered. The company referred to the fact that rail services are not provided appropriate packages. Customers have sent a claim the insurer and provider, and the insurance company in turn has expressed its willingness to demand money from the supplier company through the courts. As a result, the money (in advance for this fail-oil) were returned to the company-buyer without trial. In addition, the company (or beneficiary) has received coverage in parts of the contract relating to the forgone expected profits. (According to the insurance company Energogarant.)
Short glossary of terms Insured - person or entity insures its property interest or interest of third parties. Under a contract of insurance policyholder must pay the insurance premium the insurer, to accept the obligations to pay damages. The insurer - a legal entity, created specifically for the insurance activity, as evidenced by the appropriate state license. For the premium the insurer undertakes to compensate the policyholder or beneficiary losses incurred as a result of the loss. Insured event - an event upon the occurrence of which by law or contract the insurer must pay the policyholder or beneficiary indemnity (sum insured). Premium - the amount that the policyholder must pay the insurance company (insurer). Franchise - release the insurer from the obligation to pay damages, not exceeding a certain value. (For example, a contract may indicate that losses will be compensated at an amount ranging from $ 100 - deductible. This means that losses on the lower amount will not be refunded.) Franchise is set in the contract of insurance as a percentage of the amount by which insured the goods, or in monetary terms. Deductible can be conditional and unconditional. In the case of insurance with deductible policyholder if an insured event shall be paid compensation for less deductible. (Thus, if the deductible is $ 100, with damages amounting to U.S. $ 110 reimbursement will equal $ 10) Under a contract with a conditional franchise insurer reimburses the full amount, but only if the damage exceeds the amount of franchise. Borders - application to the insurance contract with an indication of the scope and terms of total number of deliveries that take place within a certain period. Surveyor - an independent expert with appropriate license, or employee of an insurance company, which establishes that conditions of carriage contract terms and written evidence of this. Regression - the right of the insurer to claim a third party, guilty of an insured event, with a view to obtaining compensation for damages. The right to regress arises from the insurer after compensation for their losses insured (beneficiary) within the sum insured. The important clause in a contract
In every insurance contract, as well as the rules of the insurance company provides a list of exceptional cases for which the insurer is not liable. As a rule, the exceptions usually include risks related to:
* With military actions and their consequences;
* With intent or gross negligence of the insured or his representative (violation of the rules of carriage set out in the contract).
The insurer also will not pay for the missing goods if the packaging has no visible violations (eg, loss of belongings out of the container with integral seals )***.
Example 2
LLC "Service-MAP" was carrying cargo across the border under cover of TIR **** (international road carrier), insuring its responsibility in the company Ingosstrakh. Including were insured property interests of the insured in carrying out the transport of goods as a customs carrier. On the road the car was an armed attack, resulting in the cargo was stolen. In connection with the delivery of cargo a central office in Moscow fined the carrier. LLC "Service-MAP" claimed the penalty from the insurer in accordance with the rules of liability insurance trucking to customs authorities *****. Nevertheless, the insurer refused to pay indemnity. The fact is that, in accordance with the rules of insurance Ingosstrakh in the list of customs duties, which are required to reimburse the insurance company, a penalty for nondelivery of goods is not included. The court found the right insurance company. In addition, a claim the Court treated as illegal, because "the insurance risk of liability for violation of customs regulations, such as insurance wrongful interest, by virtue of paragraph 1 of Article 928 of the Civil Code are not allowed "******.
If the company for reasons of principle wants to insure some of the risks pertaining to exceptional cases (for example, the risk of loss of cargo as a result of hostilities, when the transportation route goes through areas of military action), then this should be done in the contract clause, according to which a list of insurance claims will be included these risks. Personal experience
Alexander Andrianov, Director of Finance and Economics of OAO Severstal (Cherepovets) - We conclude cargo insurance to the amount of insurance coverage, which depends on the type of cargo and delivery. For example, under customary marine insurance policy and military strike risks are excluded from standard coverage of insurers. So to broaden the standard cover is necessary to use additional clause, in particular the Institute War Clauses (military reservation. - Remarks. Edition) and Institute Strikes Clauses (strike clause. - Remarks. Edition) covering these risks. Of course, the policy with the more expensive on 0,03-0,05%.
Vera Loginova, CEO of SSF "Capital Insurance Company (Moscow) - Reservations in insurance contracts are used quite often. For example, insurance transport wood or lumber, we are not responsible for the change of qualitative characteristics of the goods, caused by humidity. When insuring the transport of cargo requiring special temperature, the standard contract terms, as a rule, does not include payment of compensation for temperature risks. Include this amount in the contract can be an additional cost. Terms of the contract
Insurance contracts vary in duration. The standard for any insurance company is agreement on a one-time insurance, which is a specific transport and is valid from 30 to 60 days from receipt of money at the expense of the insurer. During this period, the insured shall submit to the insurance company documents to prove the commission of carriage (bill, the contract with the freight forwarder), or justify why it is delayed or not possible, then the insurer will return the money paid on account of premiums, less commissions stipulated in the contract. If this happens, the contract becomes invalid, and the money was not returned.
If transportation uniform shipments are made at regular intervals, the more advantageous to conclude the general contract for insurance of all such traffic (usually it is for one year with possibility of extension). It specifies the name of the goods, mode of transport, insurance rate, payment terms and other details of the transaction. In the master agreement contains a clause sometimes that the insurer may apply the increase or decrease the ratio to the amount of insurance payment, if the conditions of shipment change.
Policyholder to inform the insurer information about each carriage (a form of communication is established by the treaty) on the day of shipment, and the insurer during the day issued the policy to a specific shipment and an invoice for payment of premiums. It is possible, and periodic payment of insurance premium deduction when the money is, for example, once a month. In this case, instead of policies to the contract included the so-called "boarder, which are compiled for each payment. Customers who sign an agreement for a year, the insurance company can provide a discount of up to 30% of the cost of insurance.
Example 3
In case of insurance of electronic equipment, which is transported by road from Moscow to Cherepovets, the contract was made "with responsibility for all risks." The sum insured was 100% of the actual value of the goods specified in a contract - 18 thousand U.S. dollars. Sign agreement with the deductible equal to 0,5% of the sum insured. In this case, the insurance rate was 0,25% of the sum insured, ie $ 45. At the conclusion of the general contract (if such carriage were regular) premium for a single shipment amounted to 31,5 dollars. (According to the insurance company "Rooks"). What determines the amount of insurance premium
The insurance premium to be paid the insurance company depends mainly on the type of cargo, route and mode of transportation. The base rate for calculating the insurance premium - the cost of the goods specified in the contract, invoice or price list manufacturer. Reference
Prices manufacturing plant is used most often for an insurance contract for the import of goods when the value of the goods in the accompanying documents clearly too low to reduce customs duties. In such cases, you can insure the shipment for the amount above specified in the accompanying documents (ie, its real value), adding to the sum insured costs that increase the value of the goods, such as the cost of delivery of goods, hiring of freight forwarding companies and customs clearance. In addition, you can insure business risks and profits.
The insurer takes into account all the possible risks to which the goods being in transit. It is believed that the more trans-shipment will be on the road (that is, the more time the cargo is transshipped from one vehicle to another), the higher the risk and therefore the cost of insurance. Therefore, in order to minimize the cost of insurance, the insurer must submit documents proving that the goods will be safe and the risk of the insured event is small. The documents should be pointed out that the product quality packaged securely guarded and transported to an appropriate vehicle (eg, for transportation of flowers need a special refrigerator). In order to assess more accurately the safe transport of cargo insurer may require the involvement of surveyors. Personal experience
Vera Loginova - If the transport cargo is transshipped from one vehicle to another, then to determine the insured amount, we can attract third party. Here is an example situation where frozen fish (8 full refrigerators, packaging - sacks) are transferred from ship to rail wagons. Loading was carried out within a few days, and at night time the goods were under the protection of employees of the port. This could lead to the loss of the goods and, consequently, change its value. Therefore, for greater safety of the goods we brought surveyors who conducted the autopsy control packing and weighing. Of course, the cost of insurance rose, as the insurance company any additional overhead costs associated with the assessment of cargo in transit.
Reduce the amount of insurance can be by the conclusion of the franchise agreement. Use a franchise makes sense if the policyholder thinks that collecting evidence of receipt of minor damage would cost more than the amount of compensation (that is, with minor damages to receive compensation has no meaning). This condition is often used, for example, insurance coverage glass (small losses will in any case, but to prove they are often not profitable).
In order to reduce the size of the insurance premium may also insurance for an amount less than the real value of the insured cargo. In this case the premium also decreases, but the insurance event reimbursement will be reduced proportional to the ratio of the sum insured to the value of the goods. How to get insurance
To the insurance company made the insurance payments, to prove that this was an accident, that is, conditions of the contract of insurance of the goods had not been violated and the goods actually hurt. The general procedure in such cases is roughly the same. The attack must notify by phone, fax, telex or e-mail insurer. Within two or three days after the insured event must be submitted to the insurance company a written statement of the requirement to pay the insurance indemnity.
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