Commercial_Correspondence

Request for comprehensive insurance

United Warehouses want to change their insurance company. In this letter they ask Westway Insurance fora OU OTATI ON.

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Example letter

3 What precautions have they taken against fire?

4 Why are they changing their insurers?

Mr B. Daracott

United Warehouses Ltd

Bruce House

Bruce Street

Aberdeen AB9 1FR

Dear Mr Daracott

Thank you for your letter of 6 April in which you enquired about insurance cover.

I enclose leaflets explaining our three fully comprehensive industrial policies which offer the sort of cover you require. Policy A351 would probably suit you best as it offers the widest protection at 45p% with full indemnification. I would stress that this is a very competitive rate.

If you would like one of our agents to call on you to discuss any details that might not be clear, I would be pleased to arrange this. However, if you are satisfied with the terms, please complete the enclosed proposal form and return it to us with your cheque for £3,700.00, and we will effect insurance as from 1 May this year.

I look forward to hearing from you.

Yours sincerely

N.Sajawt,

N.Sagum (Mr) District Manager

Enc. Leaflets A351, A352, A353

Proposal form

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reply to United Warehouses' request, notice that Westway Insurance has three policies available which offer cover under different conditions.Mr Sagum draws attention to one of them and offers to send an agent to explain the details. The rate of 45p% is mentioned with full indemnification, i.e. cover for compensation based on the market values of the client's stock and machinery.

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International Credit Cards have asked if Westway would provide a fidelity bond for one of their employees, i.e. insure him against defrauding the company. Here is the reply.

12

Example letter

Regional office

Society House

Ellison Place

Newcastle-upon-Tyne

NEI 8st

Telephone +44. (0)191326115 Ext: 4.17

Fax +44 (0)191501116

Email nsagum@westway.co.uk

Your Ref: A4517

Our Ref: 1/47/9165

Date: 17 August 20—

Mr E. Brockway International Credit Cards plc 117-120 Hardman Road Sheffield S2 2RL

Dear Mr Brockway

Thank you for your letter of 15 August in which you asked about bonding your employee, Mr Alfred Cade.

We have checked the references you gave us and he appears to have an excellent record. Therefore, we are willing to cover Mr Cade for £60,000 on the understanding that he only handles credit cards and customers' accounts. If, however, he is going to deal with cash, would you please inform us at once?

Insurance will be effected as soon as we receive the endosed proposal form, completed by you.

Yours sincerely

Saium4.

N. Sagum (Mr)

District Manager

Enc. Proposal form

Claims Department

Westway Insurance Co. Ltd

Society House

Ellison Place

Newcastle-upon-Tyne NEI 8ST

Dear Sirs,

Policy No. 18465314C

We regret to inform you that a fire broke out in the basement of our warehouse yesterday. Although the blaze was quickly brought under control, we estimate that about £18,000 worth of stock was badly damaged.

The Fire Service has advised us that the blaze was caused by an electrical fault, and is likely to have started at around midnight. Fortunately, their prompt action prevented more extensive damage.

I would be grateful if you could send us the necessary claim forms.

Yours faithfully

8.Varacott

B.Daracott (Mr) Finance Manager

Chairman BA. MacDonald A.C.A.

Directors N.S.Souness,A.Gemill An sc., B. Daracott

Registered in Scotland No.166o9

VAT No.54 gcno13

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keptv to claim Corr five devroase

Mr B. Daracott

United Warehouses Ltd

Bruce House

Bruce Street

Aberdeen AB91FR

Dear Mr Daracott

Policy No. 18465314C

1 Who investigated the claim?

2Why is Westway Insurance offering only £9,000 for the damaged stock?

I now have the report from our surveyor, Mr McNulty, who visited

your premises on 18 October to inspect the damage caused by the fire on

15 October.

From the copy of the report enclosed, you will see that although he agrees that the fire was caused by an electrical fault, he feels that £9,000 is a more accurate evaluation for damage to stock at present market prices. However, he suggests that we also pay a further £2,800 for structural damage to your premises. Consequently, we are prepared to offer you a total of £11,800 compensation under the terms of your policy.

If you accept this assessment, please would you complete the enclosed claim form and return it to us, with a covering letter of confirmation?

Yours sincerely

Pru,e,t-

D. Pruet (Mr)

Claims Manager

Enc. Claim form

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MARINE INSURANCE

Liloyd's of London

LLOYD'S OF LONDON is not an insurance company but an international insurance market consisting of insurance brokers and UNDERWRITERS Who are controlled by Lloyd's Council.

If insurance is to be arranged through a Lloyd's underwriter (and remember, there are other insurance associations), the transaction has to go through a Lloyd's broker who, working for a commission, will contact underwriters on behalf of the client to get a competitive rate. Underwriters finance the insurance, which means they will pay the claims and take the premiums as their fees. They usually work in SYNDICATES in order to spread the risk, with large corporations supporting the syndicates. Syndicates may cover marine insurance or non-marine insurance such as motor and aviation insurance, or life assurance. Members of syndicates write the insurance details on a Lloyd's slip, which is sent to the Lloyd's Policy Signing Office where it is checked and signed on behalf of the syndicate concerned. Underwriters get a percentage of the premiums they guarantee. If, for example, an underwriter accepts 15% of a fio,000 policy, he or she will be responsible for £1,500 compensation in the event of a claim and will receive 15% of the premium.

Lloyd's is responsible for, or associated with,

a number of publications:

a daily newspaper read throughout the world, which gives details of shipping movements, sea and air accidents, fires, strikes, etc., and essential information concerning shipping and dry cargo markets.

—Lloyd's Shipping Index offers daily details of the movements of merchant ships.

—Lloyd's Loading List provides UK and European exporters with information on cargo carriers to all parts of the world.

— Lloyd's Register of Shipping, though independent of Lloyd's, works closely with the organization to produce vessel classifications giving details of age, ownership, and tonnage. The highest classification as to seaworthiness and condition is 100—Al.

ARafrine insomance packs

Generally, marine insurance is governed by the International Underwriting Association's

(ruA's) three main clauses, called Institute 12 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.

VALUED 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.

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In this case an insurance certificate covers the agreement.

For goods by air, Institute Cargo Clauses provide similar cover to marine insurance. Insurance by air is cheaper than by sea as the time taken to transport goods is shorter.

Most policies cover GENERAL AVERAGE SACRIFICE, which means that compensation will be paid for goods which have been deliberately thrown overboard (e.g. highly flammable goods if fire broke out), but it is essential that the client checks the clauses of the policy.

As is the case in large claims in non-marine insurance, AVERAGE ADJUSTER S, i.e. assessors, are called in to examine damage and estimate compensation. In a CIF transaction, the exporter transfers their right to compensation to the importer as the importer holds the bill of lading. In FOB and cFR transactions, the importer holds the insurance policy as they arrange their own insurance.

`KENT, CLARKE c& CO.TD

SOUTH BANK HOUSE•BOROUGH ROAD•LONDON SE1 OAA

TELEPHONE: +44 (0)20 7928 7716 .FACSIMILE:+44(0)2079287 111

Email: simpsonj@kencla.com

Facsimile

Fax 020 7263 6925

From J.D. Simpson

Date 15 May 20—

Pages 3

Subject Delta shipment

We will be sending on behalf of our clients, Delta Computers Ltd, a

consignment of 20 computers to N.Z. Business Machines Pty, Wellington, New Zealand. The consignment is to be loaded onto the Northern Cross,

ex-Tilbury 18 May due Wellington 25 June.

Details of packing and values are attached. Please quote AR port-to-port rate.

We would appreciate a prompt reply.

J. V. SLOT-sorb

J. D. Simpson (Mr)

Supervisor

CHAIRMAN:LORD MATHERSON

DI RECTORS:B. KENT A.C.A., C.D. CLARKE H.N.D., R.P. DILLER

REG NO:LONDON 3395162

VAT NO:41618231 59

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•qui(Aaillerri) for/

Le mane iinsurance

In this reply to Kent, Clarke, & Co., Worldwide Insurance suggest a valued policy, which would cover the consignment for f22,000 plus io% against all risks including war, strike, and normal and exceptional damage.The

12 consignment would be insured from the date

X the ship leaves port to its

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arrival.A DECLARATION

C.FORM gives the

•insurance company

Dear Mr Simpson

Thank you for your fax of 15 May regarding the above cover.

I notice the net amount of the invoice is £22,000, and payment is by letter of credit. I would therefore suggest a port-to-port AR valued policy for which we can quote £4.3 5p%.

We will issue a cover note as soon as you have completed and returned the attached declaration form.

Yours sincerely

David Adair

David Adair

Manager

Quotations Department

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