Credit to: Ms. Pham Thi Ha, professor of insurance for Foreign Trade University.
1. The need to import and export insurance carrier of goods by sea
- Goods transported by sea are often risky.
- The responsibility of the carrier is limited and the claims for compensation difficult
- Purchase insurance to protect the interests of the business when the losses and create an interest in psychology and business
- Purchase of insurance for goods import and export is an international trade practice
2. Insurer's liability for goods covered under the current conditions
2.1.1. Concept : The insurance conditions are the responsibility stipulated by the insurer for the insured (goods) on the surface: the risk of loss, time and space - is the zoning or the risk risk insurance
2.1.2. The conditions of the UK insurance
- Due to technical committee and provisions (clauses and Technical committee) of the Insurance School Assembly London (Institute of London Underwriters - Ilu) editor. The conditions of this insurance is referred to the ICC (Institute Cargo Clauses):
+ FPA (Free from Particular Average): điều kiện miễn tổn thất riêng
+ WA (With Particular Average): điều kiện bảo hiểm tổn thất riêng
+ AR (All Risk): conditions for all risks insurance
+ WR (War Risk): conditions of the insurance risks of war
+ SRCC: hedging conditions strike
First three conditions of insurance coverage are three principal conditions, conditions 4 and 5 as a condition of insurance risks in particular
- ICC 1982:
+ C coverage equivalent to the FPA
+ B coverage equivalent to WA
+ A: coverage equivalent to the AR
+ WR
+ SRCC
2.1.3. The conditions of the Vietnamese insurance
- Use common rules (QTC) issued by the Finance Ministry, the main contents of the QTC is also based on the content of the ICC:
+) QTC 1965: FPA, WA, AR similar to the 1963 ICC, not to mention WR and SRCC
+) 1990 QTC: C, B, A similar to ICC 1982
2.2. Responsibilities of the insurer under the terms of insurance
2.2.1. About the risk of loss
a) The ICC QTC 1963 and 1965:
FPA * Conditions: the conditions of general average insurance, insurance only for losses caused four main risks (shipwreck, stranding, fire, collision) and loss of resources while unloading cargo transfer load.Specific compensation insurance 6 cases:
- Total loss due to natural disasters
- Total loss due to accidents at sea
- Loss of parts because of accidents at sea
- Losses due to natural disaster department, but limited to the four main risk
- The reasonable costs:
- The reasonable costs:
+ Cost rescue
+ Cost prevent, limit losses
+ Cost assessment and determination of loss
+ Cost of complaints and proceedings
- Any costs that owners spend to protect the interests of insurance companies
- The responsibilities that must be insured under the terms "collision of two ships both to blame"
* Conditions WA: 7 'compensation insurance in case:
- FPA
- Losses due to natural disaster department is not limited to four main risks
- The purchase of insurance in WA can also participate in various kinds of insurance risk women (WA + additional risks: torn, broken, rusted, crushed, bent, buckled, steaming breath, smell loss, damage spreading, spreading dirt, rain water, sea water, hook ...)
- The insurance deductible amount and the proposed resolution the following principles:
+ Not to mention the losses due to free four main risks, war risks, strikes, and the additional risks caused by human
+ Do not add the cost to reach the deductible, only the actual loss
+ Calculated consecutive losses occur as long to reach common
+ Each barge is a vessel is considered to calculate the deductible
+ The insured has the right to free choice of how often the most beneficial for you to be compensated more than
AR * Conditions: insurance compensation in 8 cases:
- WA
- The additional risks (lack of fire, collision, damage, breakage, hook, get hurt, get dirty, autoclave, rain water, sea, torn, broken, rusted, crushed, bent, warping, rot crushed, broken air conditioning, theft, theft, lack of communication, no delivery and other hazards have agreed to add)
* FPA and AR did not set out the deductible
- Cons of ICC 1963:
+ Calling the conditions under contents insurance as it is ambiguous
+ Distinction total loss and partial loss
+ Risk piracy problem
+ The form of insurance
b) According to the ICC in 1982 and 1990 QTC
Conditions C : 7 'compensation insurance in case:
+) Stranding, sinking, fire, collision
+) Discharge at a port of distress
+) Transportation Road toppled or derailed
+) General average losses and other reasonable expenses (expenses rescue, prevention and limitation costs injuries, assessment costs, expenses claims proceedings)
+) Throw-out boat
+) Missing
+) The liability that the insured person shall be subject to under Section 2 boat collision both to blame
* Condition B: compensation insurance in 11 cases:
- C
- Earthquakes, volcanic eruptions, lightning strikes
- Water from the ship rolling
- Sea water, river water, lake water overflows into the ship, cargo hold, barge, transport or store where
- Total loss of any package which by falling from a boat or dropped during loading and unloading goods
* Condition A: the insurance compensation in 12 cases:
- B
- Losses due to the additional risks caused: torn, broken, rusted, crushed, bent, buckled, steaming breath, smell loss, damage spread, spread dirty, malicious acts or vandalism (not insured ), bump into other goods, burglary, theft, robbery, rain, lack of transport or delivery of goods, hook or similar risks
* A, B, C are the main conditions of insurance
* The insurance sub-conditions: war, strikes (only exists in the ICC 1982, 1990 QTC not specified)
* The risk of exclusion:
- Smuggling
- Error of the insured
- Ship stray
- Ship's seaworthiness is not enough
- Latent
- Interior spleen
- Loss of financial capacity of the vessel
2.2.2. Spatial and time
- Provisions in the terms "journey": the insurer is responsible for the goods from warehouse to warehouse - "Transit Clause: from warehouse to warehouse"
To distance from ports to warehouses to: insurance shall within 60 days
- Insurance will expire depending on one of two conditions:
+ Goods have been put in safe storage (no need to wait until the end of 60 days)
+ After 60 days of completion of discharge
- Dry: a warehouse where the goods have been packaged in a fully loaded onto waiting transport by road and river ports to carry out either stock is listed on the insurance contract
- Store to: is the last stock owned or managed by the insured or a warehouse outside the normal course of transportation of the vessel or a repository that is sending the wrong goods or the warehouse to which the assured Insurance used as a place of storage, storage or distribution or storage of goods named in the insurance contract
3. Insurance contract
3.1. Concept
3.1.1. Definitions
- The insurance contract is a document in which the insurer is committed to indemnify the insured when the insured losses due to risks caused agreed, while the insured pay commitments premium
3.1.2. Nature
- As a compensation document (contract of indemnity)
- As a credit contract (contract of goodfaith)
- A written assignment may be (negotiable contract)
3.1.3. Classification
* Insurance contracts voyage (Voyage Policy): the insurance contract for a shipment or a shipment is transported from one port to another port
+ Effect: always follow from warehouse to warehouse clause
+ Only the value of each shipment
+ Shown by the insurance policy or certificate of insurance
Insurance: contents include two aspects:
- On the first: recording the details of cargo, ships, itineraries, the insurer and the insured person:
+ Name and address of the insurer and the insured
+ Name, quantity, weight, number of bills of lading
+ Ship name, departure date
Port to port to port transport
+ The value of insurance, insured sum
+ Insurance terms
The rate of premiums, premium
+ Place and damage assessment agencies
+ Where and how to compensate
+ Date and signature of insurance company
- Face 2: The printed rules and regulations of insurance companies
Certificate of insurance: a policy brief, just as in a content of the insurance policy
How the insurance contract (Floating Policy) is a contract for insurance for multiple trips, many lots in a certain period of time
Auto value flexibility, reduce time and costs and avoid negotiations have failed to sign insurance contracts
Valuation of insurance contracts (valued Policy): the type of contract you sign people clearly value or amount of coverage of insurance contracts
Insurance contracts are not priced (Unvalued Policy) is a signed contract when it did not specify the amount insured or the insured value but indicates the principle for calculating the amount or value of the insurance base on the value of goods at ports of arrival on ships or on ships to be registered to or value of goods at a loss, as compensation or as compensation for accepting
Vietnam: do not use insurance contracts are not priced
3.2. The content of insurance contracts
3.2.1. Insurance value (V)
Insured value is the value of the insured at the start of additional insurance premiums and other related costs
V = C + I + F (+ a) = CIF (+ a) (1)
I = CIF x R (2)
In which: +) C: FOB price of the goods (at the port of shipment, based on commercial invoice)
+) I: insurance
+) F: freight
+) A: The estimated percentage interest
+) R: the ratio of premiums
(1) & (2) => CIF = C + F + CIF x R
CIF (1 – R) = C + F
=>V = CIF = (C + F)/ (1 – R) (3)
- If you buy insurance for both calculating accrued interest:
Interest V = (C + F) (1 + a) / (1 - R) (4)
+) Typically a = 10% (in the formula 4)
+) In Equation (3) a = 0
3.2.2. Insurance amount (A)
- Is all or part of the value of insurance by the insured and the insurance requirements
- In principle A ≤ V
A = V = (C + F)(1 + a) / (1 – R)
A / V: amount of compensation with the value loss multiplied by the A / V
- The import and export business, if the sum assured only by the value of the invoice or FOB or CFR value of goods insured is not fully insured under the insurance value or values (under insurance)
3.2.3. Insurance (I)
- Being a small amount that the insured must pay the premium to be compensated when there is loss due to risks caused agreed
- Often are calculated based on the calculated probability of the risks caused damages on the basis of statistics or loss
- Insurance premiums for cargo import and export is calculated on the basis of rates and premiums depend on the amount insured or the insured value.
If A = V => I = Rx V or I = (C + F) (1 + a) R / (1 - R)
If the A / V => I = R x A
- At the 1990 QTC:
+ For imported goods and goods purchased insurance in Vietnam, then a ≤ 10%
+ For goods exports (CIF sale), then by how much is due to a deal between buyer and seller in the sale and purchase contract
Sell CIF / CIP Incoterms 2000 in the sales contract that has no regulations about insurance is often a condition of insurance with minimum C, if we include the interest expected to purchase 110% of value of CIF / CIP, and insurance by the L / C provisions
Incoterms 2000 stipulates the date on the insurance contract must be on or before the date on the B / L or on cargo shipped
3.2.4. Rate premium (R)
- Calculated on the basis of statistical risk of loss
- In Vietnam: issue 5 years based on the framework for insurance issued by the Ministry of Finance
- Depends on many factors:
+ Type of goods, packaging
+ The line (on the deck or hatches)
+ Type of ship (often flag flag vessels, vessel age ...)
+ Shipping distance
+ Insurance terms
+ Relationships with insurance companies
+ A national policy
3.2.5. Damage assessment, complaints and claims
a. Damage assessment
- The work of the expert assessment of the insurer or the company's expertise is authorized insurer, in order to determine the nature, causes, extent and responsibility for losses as a basis for compensation
- The inspection agency must be specified in the insurance contract
- They are made when the goods are damaged, broken, deficiencies, deteriorated ... in the port of arrival (no later than 60 days after discharge from the ship) or along the roads and ports are covered by the requirements .
- Upon request the assessment, if significant damage assessment must be conducted immediately before or during unloading, if the loss is not clear assessment must be conducted within the time allowed up L / R
- The case of losses due to ship sinking, every loss, lack of transport or delivery need not be inspected
- After the assessment, the examiner will issue certificates of inspection as: Minutes of inspection or certificate of inspection
b) Complaints
- Must demonstrate:
+ The complainants have insurance benefits
+ The goods were insured
+ Loss of an insured risk
+ + The value of insurance, insured sum
+ The level of losses
+ Amount of compensation
Ensure the principles of subrogation
- File a complaint: Includes the following documents:
+ A complaint stating the amount of compensation of the parties
+ The policy or certificate of insurance or the original insurance contract
+ B / L original and C / P if
+ Commercial invoice, original
+ Bill for other costs, if any
+ Examination record (Survey Report)
+ Minutes of receiving ships of settlement (ROROC)
+ The record of broken damaged (COR)
+ Certificate of deficiency (CSC)
+ Thư dự kháng (Letter of Reservation)
+ Sea protest (Sea Protest)
+ Logbooks (Log Book)
+ Cash compensation table of the parties
- Time limits for complaints:
+ The duration of insurance claims is two years under the ICC in 1982 and since 1990 has QTC damage or loss discovered
+ The complaint must be sent to the insurance company within 9 months from the date of damage or loss discovered
c) Compensation for loss
- Principles of calculating compensation for loss of insurers in Vietnam:
+) Compensation in cash rather than in kind if not agreed otherwise, the premium paid in the currencies that are compensated in that currency
+) In principle, the insurer's liability is limited in scope, but when the amount of insurance plus all other reasonable expenses (salvage charges, cost assessment, cost assessment and re-sale loss of goods, cost of compensation claims against the third third, general average contributions) to the amount of compensation exceeds the amount insured, the insurance companies still have to pay compensation
+) When payment of compensation, the insurer may deduct the income of the insured in the sale and claim from a third party
* The calculation, compensation for loss
- The actual total loss: compensation insurer the full amount insured or the insured value
- Estimated total loss:
+ If the insured to give notice of the insurer and the insurer accepts the entire compensation
+ If the insured did not abandon or give up every insurer shall not accept compensation shall only be such as partial loss
- Loss of parts: in principle, to ensure accurate compensation, compensation based on the formula:
P = ((V 1 - V 2 ) / V 1 ) x A (hoặc A / V neu A <V)
- The calculation of compensation for partial loss in Vietnam often occurs following cases:
+ Compensation for losses due to breakage, damage, deficiency, decreased quality assessment ... have proven records:
. If the expert's report marked reduction in commercial value: P = m. A
. If the expert's report did not write down the value of recorded trade but the quantity and weight of the goods deficit: P = (T2/T1). A (T2: the weight / quantity of the goods deficit , T1: weight / quantity of the goods under the contract)
+ Compensation for lost resources requirements: if the event is the unit price, the amount of compensation by the number of packages lost its price, if not compensated as in the case of loss, weight
+ Compensation costs:
. Costs of the proceedings and prevent or minimize damage to protect the interests of the insured goods or the costs related to third party claims for compensation
. Damage assessment costs of liability insurance
+ General Average Compensation:
. General average sacrifice, if all or a portion of the shipment being sacrificed to save the ship and is recognized as the general average compensation insurer will have to sacrifice value
. General average contributions: on the basis of the allocation of general average by computing professionals should make the general average, the insurer will reimburse the owners share the common losses, whether insured goods under what conditions.
- Time limit for payment of compensation: 30 days after the insurer receives a valid complaint
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