Insurance

1. Read and learn the following words and word combinations. Translate the examples:

insure (against) v – страхувати (від); ~against all risks (a.a.r.) – повне страхування; страхування проти/від усіх ризиків; syn. to cover – забезпечувати грошове покриття

insurer n – страхувальник; insured – застрахована особа

insurance n – страховка; insurance policy – страховий поліс; insurance premium – страхова премія; insurance certificate – страхове свідоцтво; marine insurance – морське страхування

e.g. Insurance covers an event that might happen, such as fire.

damage v – пошкоджувати

damage n – пошкодження, збитки

loss n – збитки, втрата; to incur losses/to sustain losses/ to suffer losses – нести збитки, втрати

e.g. Accidents may damage the goods and cause losses.

indemnity n – компенсація (збитків); відшкодування (збитків); to obtain indemnity – отримати компенсацію; to claim indemnity – вимагати компенсацію; insurance indemnity – страхове відшкодування; syn. compensation, reimbursement

e.g. In case of an accident the insured must claim indemnity.

pilferage n – незначна крадіжка; викрадення окремих місць вантажу

e.g. During transportation the consignment was insured against pilferage.

average n – страх. аварія; general average – загальна аварія; particular average – часткова аварія

e.g. In the insurance business the word average means loss.

consignment n – вантаж, партія товару; consignor – відправник вантажу;

consignee – отримувач/адресат вантажу;

e.g. Particular average refers to a loss incurred by one consignor.

underwrite v – 1) приймати на страхування; 2) підписувати поліс морського страхування

underwriter n – страхувальник (зазвичай у морському страхуванні)

e.g. Lloyds was originally a group of marine underwriters.

II. Read and translate the text:

Insurance

Trading has always been a risky business. In old times very often the ships sent on long voyages never returned to port. A rich merchant could become a poor man overnight if his ship laden with cargo was lost at sea. Robbers attacked the caravans and took the merchants’ money and goods. Even today acci­dents, fire or theft may damage the goods and cause losses for the buyer or seller. In order to avoid these accidents today it is natural to insure the shipment of goods against these risks.

All sensible businessmen now insure goods for the full value. The idea of insurance is to obtain indemnity in case of damage or loss. Insurance is against risk. Insurance is one of the aids to trade, allowing risks to be taken without fear of disastrous loss. Without adequate insurance many enterprises would be too risky to undertake. It is essential that all goods for export be covered by insurance at every stage of transportation.

While the goods are in a warehouse, the insurance covers the risk of fire, burglary, etc. As soon as the goods are in transit they are insured against pilferage, damage by water, breakage or leakage. Other risks may also be covered. The insured is better protected if his goods are insured against all risks /a.a.r./. The goods may be also covered against general or particular average. In the insurance business the word ‘average’ means loss. Particular average refers to risks affecting only one shipper’s consignment. General average refers to a loss incurred by one consignor but shared by all the other consignors who use the same vessel on the same voyage.

In a foreign trade transaction the terms of the contract of sale will indi­cate whether the costs of insurance will be paid by the seller or the buyer. The document that gives the details of what the insured party has to pay or what the insurance company will do if the goods are damaged or lost is called the insurance policy. The insurance policy forms part of the shipping documents. The amount of the insurance charges, insurance premium, will depend on the value of the goods insured and the risk involved.

In the old days when there were yet no insurance companies a merchant who wanted to insure the voyage of a ship would ask various other merchants how much they would pay him if his ship was lost. These other merchants would write their names and the amount accepted under the details of the contract. As for example, merchant X wanted to insure his ship for five hundred thousand pounds. He went to merchant A who signed for twenty thousand pounds, to merchant B who signed for thirty thousand and so on until he was fully covered. Merchants A, B, C, etc. were called the underwriters, a word which is still used today.

Lloyds of London is an association of underwriters best known for marine insurance. lt originated as a group of underwriters who met at a London coffee house owned by Edward L1oyd, who had a reputation for obtaining up-to-date information about shipping movements. Merchants and ship-owners met to arrange insurance for ships and their cargoes and in 1680 Lloyds of London was formed. Although marine insurance still accounts for over 40 per cent of Lloyds’ business, it now covers many different risks. It was the first insurer of cover for burglary, car or planes. As well as insurance, Lloyds provides a comprehensive shipping information service. The Shipping Index records the movements of ships throughout the world, showing where they are, which port they were at last and where they are going to.

Principles of insurance

All insurance is governed by certain principles.

1) A person can only insure an event which will cause a personal or monetary loss.

2) Person taking out insurance must not tell lies or omit to mention relevant facts which might affect the insurer’s decision about whether to issue a policy or what premium to charge.

3) lf a claim is made the insured person should be restored to the same position he or she was in before the event. Nobody can make a profit out of insurance. No one must encourage damage in order to get money.

* Lloyds’ Shipping Index – реєстр Ллойдз; перелік морських суден, що видається компанією Ллойдз

III. Answer the following questions:

1. What risks do businessmen face in export trade?

2. How do exporters protect themselves against possible risks?

3. What is the essence of insurance?

4. What does the word ‘average’ mean in the insurance business?

5. What information is given in the insurance policy?

6. What does the insurance premium depend on?

7. How did the term ‘underwriter’ originate?

8. When and how was Lloyds of London established?

9. What services does the modern Corporation of Lloyds provide?

10. What are the main principles of insurance?

IV. Give Ukrainian equivalents of the following:

to insure goods for the full value; to take a risk; to be covered by insurance; burglary; breakage; leakage; to be insured a.a.r.; the amount of insurance charge; up-to-date information; to take out insurance; to make a claim; to encourage damage.

V. Give English equivalents of the following:

отримувати відшкодування; не боячись катастрофічних збитків; на кожному етапі перевезення; страхувати на випадок загальної чи часткової аварії; умови комерційного контракту; рух вантажів; керуватись певними принципами; пропускати (не згадувати); бути відновленим в тому ж самому стані; скарга (претензія).

5. Match the definition on the right with the word on the left. Translate and learn the definitions:

   to ensure	possibility or chance of meeting danger, suffering loss, etc.
   to underwrite	to make a contract that promises to pay a sum of money in case of accident, damage, loss, death, etc.
   damage	safeguard against loss
   insurance	to take responsibility for all or part of possible loss (by signing an agreement about insurance, esp. of ships)
   risk	harm or injury that causes loss of value

6. Fill in the gaps with the words from the list below:

reimbursement, insured a.a.r., to compensate, insurance, damaged

1. We now have all our consignment ….

2. They were sorry to hear that part of goods had been ….

3. The insurance company agreed … the incurred losses.

4. When taking out … don’t forget to mention all relevant facts.

5. … helped to restore his business in the shortest time possible.

5. Match the synonyms. Use any 5 words in the sentences of your own:

indemnity	insurer
underwriter	loss
average	reimbursement
burglary	cover
insure	pilferage
vessel	transportation
shipping	ship

IX. Match the words with the opposite meaning. Use any 5 words in the sentsnces of your own:

general	obsolete
restore	profit
up-to-date	damage
lie	particular
loss	truth

10. Which of these words does not belong to the following groups? Make up sentences with the given word combinations:

	policy		theft
insurance	certificate	to insure against	burglary
	premium		pilferage
	consignment		strike

to incur		to cover
to sustain	losses	to compensate	damage
to suffer		to reimburse
to examine		to arrange

XI. Translate into English:

1. Наша страхова премія була збільшена.

2. При загальній аварії збитки поділяються між усіма вантажовідправ­никами, що користуються тим же судном у тому ж рейсі.

3. Ця компанія готова відшкодувати збитки і замінити пошкоджений товар.

4. Оскільки ми понесли значні збитки від часткових аварій в мину­лому році, тепер ми страхуємо наші вантажі від усіх можливих ризи­ків.

5. Коли ви висловили претензію до цієї страхової компанії?

6. Страховий поліс разом з іншими транспортними документами над­силається до банку.

XII. Topics for discussion:

1. Speak about the possible risks in export trade.

2. Insurance as an essential part of the contract of sale.

3. Lloyds of London and its activities.

XIII. Skills practice:

Assignment 1. Look through the following letters. Define the problem discussed and its solution.

Letter 1

Dear Sirs,

We received your consignment on 15^th December. Our agent noticed that the cases 9, 10 and 11 were broken. It looks as if some heavy object was dropped on these cases. We opened the cases completely and contacted the Lloyd’s surveyor. He is examining the damage at the moment and no doubt will send his detailed report as soon as possible.

You hold the insurance policy. We would be obliged if you would take up the matter with the insurers. The Insurance Certificate number is As/26241. Do you want us to send the certificate to you?

With best wishes…

Letter 2

Dear Sirs,

Thank you for your letter of 18^th December. We are sorry to hear that the part of goods was damaged. We have checked the packing list for cases 9, 10 and 11 and we have arranged to send replacement in the nearest future.

It will not be necessary to send the Certificate of Insurance. We hold a floating policy covering our consignment against all risks, but excluding war risks. We used to insure free of particular average but since we incurred a considerable number of particular average losses, we now have all our consignment insured a.a.r.

We trust these arrangements are to your satisfaction.

Yours faithfully…

Assignment 2. Find in the letters above information concerning insurance. What made the exporter switch from f.p.a. insurance to a.a.r. insurance?

Unit Eleven

Means of payment in foreign trade