5.

Cargo insurance
policy

“The best way to predict the

future is to create it”
Einstein
Content of presentation
1. Insured interest
2. The risks insured
3. Exclusions
4. Sum insured
5. Types of contracts and period of insurance
6. Modalities of payment of premium
7. Currency
8. Claims procedure
9. Information necessary for providing an offer
1. Insured interest
What goods can be insured?
- all the goods that are being transported, e.g. raw materials, work
in progress, finished goods, equipment beeing brought to be
installed.
- the intermediary storage necessary during the transport can be
covered.

Who is making the insurance?

• The owner of the goods, according to INCOTERMS or any other
person who has an insurable interest (e.g. a bank).
• The carrier or forwarder can make their own insurance:
• Carrier’s Liability or Forwarder’s Liability.
• In some cases the owner of the goods impose to the forwarder
or transporter to cover all the risks related to goods. This
situation is atypical.
 2. The risks insured

Insurance conditions

The standard coverage is provided by Institute Cargo Clauses (ICC):

• ICC “A” - All Risks
• ICC “B”
• ICC “C”

To the above types of coverage some additional risks can be covered

by special clauses:
• + risks specific to the nature of the goods transported (e.g.
moisture, spotting, petrifaction, rusting etc.)
• + war, civil war, revolution, riot
• + strike, civil commotion
2. The risks insured (continued)
ICC “A”:
All Risks - any risks of physical loss or damage not specified but not
expressly excluded

ICC “B” - risks covered by ICC C plus the following:

+ Earthquake
+ Washing Overboard (deck cargo)
+ Sea/river/lake water entering Ship, Conveyance
+ Loss overboard during Loading/Discharge (total loss only)

ICC “C”
 Fire and Explosion
 Overturning or Derailment of Land Conveyance
 Contact of Ship, Craft or Conveyance with other object
(excludes Water but not Ice)
 Discharge of Cargo at Port of Distress .
 Jettison
General Average Sacrifice
3. Exclusions

Major exclusions
• loss, damage or expense attributable to wilful misconduct of the
Assured
• ordinary leakage, ordinary loss in weight or volume, or ordinary
wear and tear of the subject-matter insured
• loss damage or expense caused by insufficiency or unsuitability of
packing or preparation of the subject-matter insured
• loss damage or expense caused by inherent vice or nature of the
subject-matter insured
3. Exclusions (continued)
Special Exclusions
• Theft / pilferage, non delivery - risks excluded in under clauses ICC
B and ICC C.
• War risks
• Strike , Riot and Civil Commotion
• Terrorism
4. Sum insured
Production value or invoice value
In addition to this value the following expenses can be insured:
+ cost of transport (freight)
+ duty, VAT and other expenses
+ the insurance premium
+ over-insurance up to 10 % from the value of the goods (this item
covers other unforeseen expenses proved by documents and not
the expected profit.)
5. Types of contracts and period of insurance

“Open” policy
- Efficient for a high frequency of the transports.
- Usually concluded for a year.

“One-off” policy
- usual for casual transports.
- there is no time limit; the insurance is concluded “Warehouse to
warehouse”.
6. Modalities of payment of premium

• Minimum and Deposit premium (usually between 70 and 80% from

annual estimated premium) at inception. The premium is adjusted
at the end of the policy year based on actual transported value.
• Minimum premium means that this is the minimum amount
acceptable by the insurer. Deposit premium means that the amount
must be paid by the insured at the beginning of insurance.

• Monthly payment of estimated premium

• Quarterly payment of estimated premium.
7. Currency

Payment of premium Payment of indemnities

in RON in RON

in hard currency, if the

in hard currency invoices for the goods are
issued in currency.

equivalent in ROL of the

indemnity considering the
exchange rate at the date of
issuance of the policy.
8. Claims procedure

• To inspect the cargo at destination. All the loss or damages

observed at arrival must be written into the transport documents.
• To notify the loss or damages to the broker or insurer.
• To take al the reasonable measures to mitigate the extent of loss
and to preserve the goods.
• To sent Letters of Protest to all the parties involved (e.f. forwarder,
carriers) in order to hold them liable for the damages.
• To support the insurer’s representatives or designated surveyors in
order to determine the nature, cause and extent of loss/damage.
• To collect all the documents relevant for the claim and which prove
the extent of loss and other expenses. To send them to insurer.
9. Information necessary for providing an offer

 Description of the goods transported

 Quantity / packaging list / weight / volume
 Packing and labelling
 Sum insured and what it contains
 Routes
 Places of transhipments
 Means of conveyance
 Frequency of transports
 Supervision at place of loading / discharging
Thank you!