外贸英语实务 （第二版）,Unit 6 International Cargo Transport Insurance,Part I Case Lead-in,Part II Reading,Part III Sample Conversations,Contents,The contract was concluded on a CIF basis and the goods were insured All Risks and War Risk as per provisions of the PICC. After arrival of the goods at the port of destination, the buyer opened the container and was astonished to find most of the packages were not bounded with belts and this have resulted in damage to the goods. The buyer lodged a claim against the seller for the losses. The seller requested the buyer to contact the carriers and insurer immediately and ask them to examine the goods at the site and issue relevant survey reports first, and then send these documents directly to the seller. But the buyer only sent some photos covering the damage together with a certificate signed by the truck driver 3 months later, and privately disposed of the damaged goods without permission of the consignor, carrier and insurer. Who should pay for the losses in this case? Why?,Insurance is a key issue in international trade . The transportation of goods from the exporter to the importer is generally over a long distance and it has to go through the procedure s of trans it, loading and unloading, storage , etc. It is customary to insure the goods against risks of collision, leakage , pilferage , fire and storm , etc. In the s ale s contract, insurance clause including insurer, insured, insured amount and other aspects should be expressly stipulated.,International Cargo Transport Insurance,In international trade, goods traveling a long distance to another country, out of the direct physical control of both the exporter and the importer, may face all kinds of risks. Cargo transport insurance is to protect the interests of traders from possible financial losses caused by such risks during transportation. It is a contract whereby the insurer, on the basis of premium paid, undertakes to indemnify the insured against losses.,Marine Cargo Insurance,Risks, losses and expenses (1) Risks Two types of risks covered by ocean marine insurance are perils of the sea and extraneous risks. Perils of the sea include both natural calamities and unexpected accidents. Natural calamities refer to the perils under force majeure such as vile weather, lightening, tsunami and volcanic eruption. Unexpected accidents are such risks as fire, explosion, vessel being stranded, grounded or sunk and collision. Extraneous risks include both general risks and special risks. General risks include thefts and pilferage, contamination, leakage, sweating and heating, taint, fresh/rain water damage and so on. Special risks include war, strikes, failure to deliver due to some special laws and regulations and so on.,(2) Losses Marine losses are the damages to or losses of the insured goods incurred by the above risks. The losses can fall into total loss and partial loss. Total loss of goods can further be divided into actual total loss and constructive total loss. Partial loss can be either general average or particular average. Actual total loss means the whole lot of the consignment has been lost, damaged or found valueless. Constructive total loss occurs when the cost of salvaging the consignment would exceed the value of the consignment in sound condition. The consignment insured is reasonably abandoned because any further efforts at salvage would be fruitless. General average is in use when both the ship and the goods on board are endangered and the captain, for the safety of the ship and the goods on board, intentionally and reasonably does some sacrifices or makes some expenses. Particular average means that a particular consignment is partially damaged. It occurs, for example, when a storm or fire damages part of the shippers cargoes and no one elses cargoes have to be sacrificed to save the voyage.,(3) Expenses Expenses covered by ocean cargo insurance fall into two kinds. One is sue and labor expenses arising from measures properly taken by the insured and his agent for minimizing or avoiding losses caused by the risks covered in the insurance policy. The other one is salvage charge paid to a third party who comes to salvage the ship and the consignment. Marine insurance coverage Under China Insurance Clause (CIC), there are basic coverage and additional coverage for ocean marine cargo insurance. According to the nature of the goods insured, the cargo owner may choose one of the basic covers. If more protections are needed, he may further insure his goods against one or several additional risks. No additional risk can be purchased to insure goods independently.,(1) Basic coverage FPA (Free from Particular Average) FPA covers: (1) Total or constructive total loss of the whole consignment insured caused in the course of transit by natural calamities like heavy weather, lightning, tsunami, earthquake and flood. (2) Total or partial loss caused by unexpected accidents such as stranding, striking upon the rock