Selecting types of insurance coverages accordingly.
20160120105 刘玉婷 16英语1班
Cargo insurance may be classified into Ocean Marine Cargo Insurance, Overland Transportation Cargo Insurance, Air Transportation Cargo Insurance and Parcel Post Insurance. In charter 5, we study the basic coverages and terms of Ocean Marine Cargo Insurance in China in detail. Ocean Marine Cargo Insurance is divided into the following three conditions—Free from Particular Average (F.P.A), with Average (W.A.) and all Risk【1】.
F.P.A is an insurance contract clause that eliminates an insurer’s liability for partial losses. FPA clauses are most commonly found in marine insurance policies. It mainly covers: （1）the total loss of the insured goods caused by the natural calamities or fortuitous accidents on the sea.（2）the General Average caused by natural disasters or accidents on the sea. （3）the partial loss caused by the fortuitous accidents on the sea.（4）the partial loss caused by natural disasters on the sea which occur before or after fortuitous accidents【2】. For example, a Chinese textile import and export company (A company) and a shipping company in Dalian (B company) signed an agreement to transport 1000 silk shirts to Marseille. After the signing of the contract, A insured F.P.A on the shipment of the goods through insurance company. On 20th February, the goods set sail after shipment, and on 25th February, the ship that carried the goods ran into a storm at sea. The hull was badly damaged and sank on 26th February. On 20th March, A company claimed against B company for the goods, and the insurance company refused to compensate for the damage caused by the natural calamities. Therefore, A company sued the insurance company to pay the insurance money【3】. In this case, the insurance company should compensate for the damage. F.P.A. is generally not responsible for some of the losses caused by natural calamities unless there have been accidents such as grounding, rock touching, sinking and incineration in transit. F.P.A is not responsible for the partial loss but total loss. The ship with goods under F.P.A was total loss when it sank in the storm, so the insurance company should pay the money.
W.A. includes:（1）The coverage under FPA;（2）The partial loss caused by the natural calamities，such as heavy whether, lightning, tsunami, earthquake, and flood. But W.A. is different from fresh water or rain damage coverage【4】. For example, A textile company exports 100 bales of cloth to Australia. We are insured against WA. 30 packs of cloth are soaked in water because of the rupture of the edible water pipe in the cabin. But the insurance company refused to pay compensation【5】. WA only covers the total or partial loss of the goods caused by seawater immersion, In this case, the cloth are damaged by fresh water instead of seawater, A company need to buy fresh water rain special risk. Therefore, the insurance company doesn’t need to pay.
All Risks aside from WPA, this insurance also covers all risks of loss of or damage to the insured goods whether partial or total, arising from general external causes in the course of transit. It does not really cover all risks. It excludes coverage against damage caused by war, strikes, riots, etc【6】. A company in Shanghai imported machines from overseas and the manufacturer insured against All Risks. However, the machines were stolen in the wharf. All Risks includes theft, pick-up, no delivery. In this case, the insurance should take responsibility on the compensation because the machines were stolen in the wharf and they haven’t been delivered to the warehouse of A company.
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Reference：
1. 黄锡光，吴宝康. 国际贸易实务（英文）[M]. 上海：复旦大学出版社，2011.
2. PPT第五章, 第27页
3. http://m.wodefanwen.com/mlhd_7rum60tpsj1emx02t1ol_2.html
4. 3. PPT第五章，第32页
6. PPT第五章，第34页
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