Marine Insurance Policies

Generally, marine insurance is governed by the International Underwriting Association's (iua' s) three main clauses_, called Institute Cargo Clauses. The most common is Clause A, which offers the broadest form of cover on an all-risk basis. This is the most expensive. Clauses B and C offer more limited cover and consequently are cheaper. If the policy is issued by Lloyds, there are also Lloyd's own clauses, which offer different types of cover at different rates. The client must read the clauses carefully to make sure that their particular cargo is covered against all the risks that the shipment might meet. These could include strikes, war, and piracy, as well as collision and sinking.

Value policies are based on the value of the invoice plus insurance and freight, with an extra percentage, e.g. 10%, on the value of the goods. There are also unvalued policies, where the value of the goods is not agreed in advance but assessed if loss should occur. This means the client will, if their goods are damaged or destroyed, get the market price as compensation. The owner of the bill of lading has the right to claim compensation.

Goods are usually insured for a voyage on an agreed value basis. However, if a client ships regularly with a given company, they might ask for an open cover policy, e.g. for twelve months. The premium would be agreed at the beginning and the client would declare each shipment, without limit on the number of shipments they make. Alternatively, the policy might accept all shipments without declarations. An initial payment would be charged and adjusted according to the number of shipments made over that period.

Assignments

I. Memorise the following words and phrases:

underwriter	страхувальник (як правило – морський)
fee	гонорар, плата за послуги; винагорода
to pay the claim	задовольнити вимогу про відшкодування збитків
premium	страхова премія
shipping	судна, морський флот
merchant ship	торгове судно
to arrange the insurance	організувати страхування
valued policy	валютований поліс
unvalued policy	невалютований поліс
open cover policy	відкритий (генеральний) поліс
to charge payment	призначати плату

II. Suggest the Ukrainian equivalents of the words and phrases

transaction; to contact underwriters on behalf of the client; competitive rate; to cover marine insurance; cargo carrier; to claim compensation.

III. Answer the questions:

1. What is Lloyd's of London?

2. What is the insurance procedure if it is arranged through a Lloyd's underwriter?

3. Why do underwriters work in syndicates?

4. What publications is Lloyd's associated with? What information do these publications ofter?

5. What is marine insurance governed by?

6. What is the difference between valued policies and unvalued policies?

7. What clause offers the broadest form of cover?

8. What are the advantages of an open cover policy? When a client may ask for it?