CHAPTER 4 CARGO INSURANCE COVERAGES - PART 1 MARINE CARGO DECLARATION FORM, 1. There is no standard proposal form for marine cago insurance, except case of Special Declaration Poy, ‘annual Posey, Duly and increased Value insurances. The fk is assessed by the underw ter on the basis ofthe informaton given on the Declaration Form, which i obs complet ‘and signed by the proposer. 2. The Declaration Form contains flowing details ame and address ofthe proposer and his Business INbankers have an ntecastn the transaction, as would flue for insurance, that, the Sum Insured which is normally the CIF val 076, Duty Inereasod Value components are indicated separately. Name of the carrying vessel or mode of other oad or ait, a8 applicableary, "a or rant BLN tA 35 appteae NO. A Conse eta Te oF nsuran Signature of propoa — arate. to asses tn Daten ements mer propoea oss pu er nae a 2 boy, te oe ae rm a incorporate i sme Orca vatedn the poy doce Marine Cover Note ss temporary document evderansihathe insurance has been arened gendnath ste cl ney rsurance omihe ne Gover Note issued, but froma lagalpoit ol vio, CoverNae is only an advice and as uch tcannot he usedas alec cument in a lawsuit against the insurer unl Ne snirac is expressed in a Poly. In precice it woud be tinthinkable fora reputable nsuretorepudatea Covet Note isquod by him on the ground tate poli has be +5, The Cover Note i the basis ofthe contact ae courts nave the power to order the rection ot SERIE ve af the paries tothe corract the Cover Nae evidenced by the terms 83STANDARD FORM OF MARINE POLICY Alinformation ier, rey may asd yaeum vests ipo cooing vessel FANE name is oy Name a "Vessel" will Be made Immediate 2 sie sabje to ate epicable. pprowed by GI0, 28 oPPteaDI Classification Clause oF a vessg| tain cotton textes, The subec 29.100 eae85 said 0 cont type of insurance cover granted and any special Description marks and numbers a also BIL No, A Consignment Note No, alway or Lorry Receipt No, Post Parcel Recep! No,, as applicable. The purpose is toidently the insured goods. The Sum insured. A marine cargo policy isa valued policy ad the value fixed by the policy is generally onclusive andbindig on the parties to the insurance contact, nthe absence of fraud, The components of the Sum Insured may well be CIF value, plus 10% customs duty plus increased value, All these omponenis should be indicated in the policy 10 fecitate correct adjustment of claims. Duty andincreased Value ineurances are not valued polices, he premium. War and Strkes premium is shown eparatoly from marine premium. ‘Name and address ofthe Surveyor and Claims Setting fice at deatineion point oo tht fi Cn id surveyed, serviced, processed and ultimately setied n behalf ofthe insurer concerned. (pen covers 14, Unlike a specie policy, an open cover us issued 1oprovide automatic and continuous insurance protection fo ‘a regular exporter porter engaged in international rade 1, An open cover isnot a policy and therefore not stamped. tis an agreementBingling in honour, whereby the insurer undertakes to insure all shipments declared by the assured and which come within he scope of the open cover Premium is payable on each declaration, against which specie stamped certicatelpolcy is issued covering each shipment declared 16, Thus, an open coveris a convenient ar for cients engaged in substantial international rade and og considerable turnover. Once arranged, inthe insured ‘qaranteed protection onthe agreed basis forall shipments falling within its provisions, subject to declaration of full ipping details of each shipment. The client is relieved of e necessity to negotiate insurance of every shipment ual the insurer obtains ainterest inthe clont's Global business activites, "7 The advantages of an Open Cover are. As the agreement is autom: Provided forinits terms, the insured is poten the risk of any shipment remaining uninaus sight, inadvertent omission or delayed, Shipment advices trom abroad, atic aNd continuous osetia 29 dep ecg ot The necessity of buying specific poli individual shipment is for each ‘obviated, resulting in savingouy ministrative costs both forinsurersandtheireseng The premium rates are agreed at inception and his assists the insured to identity his costs of insurance Fight at the outset, which he could include in his oa costs for the goods under CIF contracts 18. Theres no sum insured in an open cover There jowever, two limits, namely Limit per Bottom: meaning, limit of aggregate valus ol ipments/consignments per vessel or oth wveyance at any one time, as per the requirements Limit per Location: The Location Clause seeks tl e sumulation which ma lue of pre-shipment 1k s Jace, say, because of strikes or labour isturbanees he port area, Such accumulation of cargo particular location may create for the insulel 88extent, be controled by the assured by regulating hi endings forward to the port of shipment. If accumulations do take place exceeding the location limit, itis for the assured to approach his insurer and range for such adgiional protection as may be ses o shipping eight for which Jaration andlor shipment In the ever Declaratio he assured is bound to declare each an pment individually rin batches and obtain a Certiteat oll ym the insurer, as require, ether for individual ian {100s of shipments. he Policies issued against declarations wilt duty an appropiate premium odcepor shipments wil not vos yo 10 roPO mentor oments wil be Ret! covered, a 8 Sly fait epart shipments he ments have amived safe) the és si al pecome nl nd vidas ea cove. atin er's.option. Wal conse sett 1 the ight at any he 1p The insurer spect the records ol Inspect time dung Bus trsured as rspect si SS pments coming within the Terns of rtd spp undo ec eck waranty arte 9002 Under Dek rs ore at tsa 10 snCovermay be cancoledby ether party cancelation - OF in weting for marine sk, provided the ving 20 days noice Save nok aleady attached. War and Stikes risks, are thualy subject to 48 uss’ notice of cancelation. Jeclared to the underunter Closing Particulars - To be mediately upon receipt of shipping documents. OPEN POLICIES 20, An Open Pocy is also known as Floating Policy Gientshaving'substantal turnover and a large number of despatches can obtain continous insurance cover under ‘anOpen Paty 1. An Open Policy is issued, duly stamped, for an ‘amunteprescning the insured's estimated annual tunover %againstthe open poy, wh the ret that th Gur nse may be sued agains each declaration showing he values Insured maining under the Open Poli fear om the dat of ta is. oF, exhaustion ofthe total sum insured pir to the expiry ofthe Open Poly period 12 months, whichever frst occu aly tobe exhausted pror tothe exoiry ofthe Open Policy period of 12 months, it may be increased by issuing an dorsement and charging appropiate extra premium. 23, An Open Pai is usualy stued for insurance of geod despatched within the county by raload ir eight sued on the standard form of subjectto applicable rates and clauses Is worked aut and charged on the total sum insured, 0 following Basis of Valuation :- invoice cost of goods, the freight fo ch te insureds abl, th of insurance plus 10%, Inspection of Records Insurer wi have the ight at during business hours ta inspect the insured ecords of despatches made within the terms af the Open Poendorsements 27. Anendorsementisa memorandum atached othe goley document which records alterations in the eontract. ‘aterations may relate to, for example, change inthe sum insued, change inthe description af tha voyage, adeltion or Gelatin of risks Covered, ete. Neadless to stress thatthe aiterations can be effected only belore the end of he rans and before insurance ceases undera policy ules of Interpretation 28, The draiting of policies cequires great because, while the principal ule of construction of that the the parties to the eontract must preva that intention it be gathered from the policy document itsel! and the clauses, endorsements, warranties, ett sitached to it and forming part the contract 29. If there is any ambiguity, then the policy is construed against the innsurers andin favour of the assured because the insurers are the drafters ofthe contract. The qenera rule is that the phraseology must be construed in fense, unless the context grammar to observed in interpretation, what is importants that the plain, ordinary and popular dicates some special meaning. Whilethe ue t must predominate. the intention ofthe parties othe Technical terms always be given there strictly technical meaning, unless there isan incication othe contrary 40. The following addtional rules of interpretation construction are used to construe the terms of a policy Aocument@ o @ o o is overridden by typewntten wor ad wording Yee Se Print Jed by an inked rubber stam, sr wording meres anni ko Precedence FE YEOSOT IMR wong havens printed oF typed fo the margin ofthe poy Gepe oven more importance than te wording swine bed ofthe Pov clauses attached or gummed to the policy overide tut marginal auses and the causes inthe body of the plex jnexprss tem in policy overides an implied torm, tencopt when there isan inconsistency by so doin, the ordinary printed 2 in talios verde wording where they are ‘Clause Paramount” can only be removed from the poly by physical deletion; otherwise it overrides all ther wording, notwithstanding the rules of serpretation, Thave eno grounds tor beiovng that clauses printed Infed ovamde those printed in black. Printing in ted ours almed at emphasis on Whenever in marine insura there isan agreement 10 hold covered mut nis implied. The 94 oypremium, and, when cleatly indicated in the nag ers promptly iy, ‘stamp duty for cargo policies 31. Armarine cargo policy should be stamped as per 1 Stamp Act, 1899 and amendments thereto, imp duty is recoverable from the assured, The scale of stamp ct in force of voyage nolices is as der (a) Forsea voyage and transit by county erat 10 paise for avery FS. 1\500/- or part thereat, subject to the following When the rate charged is 18th percent (16. 0:125%) 3, the stamp duly is only 10 paise regardless of the sum insured. Tofal premium charged under the policy inclusive of premium for Wer and Strikes risks, nt when determining whether the is taken into acco ate is 18th per n Inland Transit (Rail of Ri conjunetio ith a sea voyage, 1 stamped according tothe scale for sea voyage. policy must b (b) For other than sea voyage (i.e. transit purely by rail 95