Chapter 8 International Cargo Transport Insurance ...
Learning Objectives:
◆Marine cargo transport insurance
◆Cargo insurance under other modes of transport
◆China Insurance Clauses and Institute Cargo Clauses
◆Procedures in purchasing a cover and filing a claim
◆Principles of indemnification
In international trade,your cargo travels long distances between countries or regions.Beyond the physical control of you and the importer,it may be subject to various kinds of risks en route,such as a hurricane,a lightning strike,unexpected accidents or water damage.Purchasing cargo insurance can reduce your loss if any of the risks materializes.Cargo insurance is a contract whereby the insurer,on the basis of a premium paid,undertakes to indemnify the insured against loss from certain risks or perils to which the cargo insured may be exposed.It is a type of property coverage that is comparable to other types of property coverage such as car and homeowner’s insurance which are purchased to protect the financial interests of the owner of the vehicle or house.
In international trade,one of two sets of insurance clauses is commonly adopted:China Insurance Clauses(CIC)by People’s Insurance Company of China,and Institute Cargo Clauses(ICC)byLondon Insurance Institute.Traders can stipulate their insurance terms in the sales contract as per either one of them.In this chapter,we shall mainly focus on the former and briefly touch on the latter.In China,the People’s Insurance Company of China(PICC),established in 1949,is the sole state-owned insurance company which underwrites almost all kinds of insurance and has agents in almost all main ports and regions over the world.Since its establishment,it has become customary for Chinese traders to have their imports insured with PICC as per CIC.Exports can be insured with foreign insurance companies as per ICC,or with PICC as per CIC when accepted by the importer.
In what follows,I will successively introduce the Ocean Marine Cargo Clauses,Air Cargo Clauses,Overland Cargo Clauses and Parcel Post Clauses under CIC by PICC and briefly compare ICC with CIC.