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Topic 10 (UNDERWRITING & CLAIMS - Coggle Diagram
Topic 10 (UNDERWRITING & CLAIMS
CARGO INSURANCE CLAIM
In the event of taking delivery of goods at port of destination, insured should
To present clean bill of ladng if goods are in doubtful condition- to prove that the goods are in good condition after loading process at the port of shipment
Claim immediately from the carrier, port authority or other bailees for any missing package
When the delivery is made by container, insured should immediately to ensure the container and its seal seals are in a good condition. However, if the container is delivered damage, broken seals or seals other than as stated in the bill of lading, insured need to retain of the documents and proof for subsequent inspection by a surveyor.
If the damage or loss is apparent, insured need to inform carrier to send their surveyor to survey the damage and claim on the carriers for any actual loss or damage found by the surveyor.
However, if the loss or damage was not apparent at the time of taking delivery, and discovered later, insured need to give notice in writing to the carrier within 3 days of delivery. (to comply with Hague Rule 1950)
Insured and their servants/agents in respect of loss recoverable need to
Take reasonable measure to minimize the loss
Ensure all rights against carriers or other 3rd party are properly preserved
HULL INSURANCE
Types of vessel service
Liner service
Tramp servive
Vessel currently used for Trade
container ships
roll on toll off ships
conventional ships
bulk carries
harbor and offshore vessel
fishing vessel
ITC Hull contains 26 clauses and only following clauses will be discussed:
Peril coverd (clause 6)
Exclusion
Duration of cover : Termination clause (clause 4)
Collision liability (clause 8)
Constructive total loss
Policy deductible (clause 12)
CARGO INSURANCE UNDERWRITING
Underwriting Factor
Vessel
Size of vessel (larger tonnage more stable)
Age (not more than 15 years)
Classification (ensure that vessels go through regular inspections surveys which provide the necessary technical safeguards)
Flag (represent the country of registration); standards of construction and manning in accordance with shipping regulations of the country.
Voyage
The longer the voyage, the longer the cargo will be on board will be exposed to loss or damage.
Mode & nature of inland transit and the route taken (fewer ports of call en route, the faster the delivery)
methods of discharge at ports; directly on the quay or on lighters loading & unloading facilities at ports.
Congestion at ports may result in delays
Transhipment en route; long distance increase risks
Nature of goods
fragile
perishable
dangerous cargo
Types of packaging
Conventional shipment should be pack in manners which enable goods to withstand the normal handling during entire course of transit, eg:break bulk cargo
Containerization -Full container load or LCL: Less Container Load
Past claim experience
Claim record of insured can be a good source in determining the rate to be charged.
If bad claim record- reject
HULL INSURANCE UNDERWRITING
Valuation of vessel
There is more than one basis of valuation of vessel including valuation certificate by competent surveyor.
Types of vessel
More complicated the structure, the more expensive to repair. Thus, underwriter must also access type of vessel carefully to avoid large claim in the future.
Management and ownership of the vessel
Underwriter must evaluate the management and ownership of the vessel including their claim experience. It is because, the quality and experience of the vessel management will reflect the claim experience over a period of time.
Age of the vessel
Older vessel more susceptible to accidents and are costly to repair, thus age of the vessel is very crucial to the underwriter.
Trading activity
Trading activity carried by the owner of the vessel should also be accessed.Insurer should be more sensitive if the trading activity involve the journey that expose to hazard of ice, windstorm, monsoon and pirates.
Size/tonnage of the vessel
Tonnage affect premium calculation as portion of premium for particular average claim is based on tonnage of vessels.
Classification society
Classification society will classify the condition of the vessel, implement survey to maintain class of vessel and ensure seaworthy condition of vessel. Vessel which is not classify by classification society usually have high risk compared to vessel with classification by the society.
Condition of insurance and policy deductible
Policy with some amount of deductible usually has less premium compared to policy without deductible. Besides, underwriter might impose few conditions to improve the risk of the insured vessel.
Insurer's underwriting experience of similar vessel
Previous experience of underwriting similar types of vessel will help underwriter to have better assessment towards the risk.