Task2-6: conclude the insurance clause in the sales contract

1. Task2-6: conclude the insurance clause in the sales contract • Object: • Be able to conclude the insurance clause according to your real needs.

2. Task2-6: conclude the insurance clause in the sales contract • Aim of ability: • Be able to conclude the insurance clause. • Aim of quality: • Choose the suitable insurance category according to your real needs.

3. Task2-6: conclude the insurance clause in the sales contract • Knowledge point: • The advantages and disadvantages of different kinds of insurance category. • marine cargo insurance clause

4. ⅠTask description • David sun and Paul have reached a consensus about the price clause. They decide to use CIF as the trade term. • So the seller need to conclude a insurance contract with PICC. • Now they are talking about the details about the insurance clause.

5. Ⅱ relevant knowledge • （一）the insurance coverage of marine cargo transportation • （二）PICC marine cargo insurance clause • （三）other transportation insurance clause

6. （一）Scope of coverage of insurance of international marine transportation • 1. Risks • 2. Loss • 3. Expense • 4.Insurable Interest

7. Risks that could be covered

8. Perils of Sea Perils of Sea include natural Calamities and Fortuitous accidents that ships and goods encounter in marine transportation. • Category： • 1. Natural Calamities • 2. Fortuitous Accidents

9. Partial losses except GA • 1.Not for common interest of ship and goods • 2.Not intentionally made (By risks) • 3.Only including damage of the insured goods • 4.To be borne by the insured (May be reimbursed by the insuring company)

10. Comparation: PA vs GA 比较项目 单独海损 共同海损 致损 原因 由所承保的风险直接 导致船、货受损 为解除或减轻风险， 人为地有意识地造成 受损者自己承担 损失的 承担者 受益各方根据获救利 益的大小按比例分摊 损失的 内容 保险标的物 除保险标的外，还 包括支出的特殊费用

11. Charges • Sue and Labor Charges • Salvage Charges

12. Sue & Labor Charges • Also called Sue and rescuing charges, or damage prevention charges • Charges paid by the insured or his agents for prevention of expansion of damages, in case of the subject’s encountering calamities and accidents within the scope of insurance.

13. The insurer shall be obligate to reimburse the sue and labor charges thus incurred, not exceeding amount of the insured value of goods

14. Salvage Charges • Charges paid by the rescued parties to the rescuing parties other than the insured and the insurer who has successfully rescued the goods in case of the insured subject’s encountering calamities and accidents within the scope of insurance.

15. CHINA INSURANCE CLAUSES (CIC) • CIC Clause: Jan 1,1981 revision by PICC • The People's Insurance Company Of China • Ocean, Road and Railway, Airway, Parcel Post Receipt • Basic Insurance • Additional Insurance

16. Basic Covers • May be covered separately, not depending on additional insurance. • Categories: FPA, WPA, ALL RISKS

17. FPA: Free from Particular Average • FPA • =GA(1,2,3,4) • +PA(2,3,4)

18. Scope of Cover • 1. Total or Constructive Total Loss of the whole consignment hereby insured caused in the course of transit by natural calamities: heavy weather， lightning, tsunami, earthquake and flood (thunders, hurricane, earthquake, as well as other natural calamities.). • The goods on each lighter（驳船） to or from the seagoing vessel shall be deemed a separate risk.

19. 2.Total or Partial Loss caused by accidents the carrying conveyance being grounded, stranded, sunk or in collision with floating ice or other objects as well as fire or explosion ( Both to Blame Collision, other extraneous accidents).

20. 3.Partial loss of the insured goods attributable to heavy weather, lightning and/or tsunami, where the conveyance has been grounded, stranded, sunk or burnt, irrespective of whether the event or events took place before or after such accidents.

21. 4.Partial or total loss consequent on falling of entire package or packages into sea during loading, transshipment or discharge.

22. 5.Reasonable cost incurred by the insured on salvaging the goods or averting or minimizing a loss recoverable under the Policy, provided that such cost shall not exceed the sum insured of the consignment so saved.

23. 6.Losses attributable to discharge of the insured goods at a port of distress following a sea peril as well as special charges arising from loading，warehousing and forwarding of the goods at an intermediate port of call or refuge.

24. 7.Sacrifice in and Contribution to General Average and Salvage Charges. • 8.Such proportion of losses sustained by the shipowners as is to be reimbursed by the Cargo Owner under the Contract of Affreightment Both to Blame Collision clause.

25. WPA: With Particular Average • Scope of cover: • Aside from the risks covered under F.P.A. condition as above, this insurance also covers partial losses of the insured goods caused by heavy weather , lightning, tsunami , earthquake and/or flood ( thunder, as well as other natural calamities). • WPA=FPA+PA (Natural Calamities)

26. All Risks • Scope of cover: • Aside from the risks covered under the F. P. A. and WPA conditions as above, this insurance also cover all risks of loss of or damage to the insured goods whether partial or total, arising from external causes in the cause of transit. • All Risks=WPA + Total & Partial Loss（General Extraneous Risks ）

27. Exclusions • This insurance does not cover : • 1.Loss or damage caused by the intentional act or fault of the insured. • 2.Loss or damage falling under the liability of the consignor. • 3.Loss or damage arising from the inferior quality or shortage of the insured goods prior to the attachment of this insurance.

28. Additional Covers • Only to be attached to one of basic, unable to be separately covered. • Categories: • General Additional Covers • Special Additional Covers

29. General Additional Covers • Including in All Risks • T.P.N.D: Theft, Pilferage and Non-delivery • F.W.R.D: Fresh Water& Rain Damage • Risk of Shortage • Risk of Intermixture& Contamination • Risk of Leakage

30. General Additional Covers (2) • Risk of Clash & Breakage • Risk of Odor • Damage Caused by Heating &Sweating • Hook Damage • Loss or Damage caused by Breakage of packing) • Risk of Rust

31. Special Additional Covers • War Risks • Strikes • Others

32. Others • Failure to Delivery Risk • Import Duty Risk • On Deck Risk • Rejection Risk • Aflatoxin Risk • Fire Risk Extension Clause for Storage of Cargo at Destination Hong Kong or Macao

33. 选择投保一般附加险 总结 平安险 承保范围：最小 选择投保特殊附加险 选择投保一般附加险 基本险 水渍险 承保范围：居中 选择投保特殊附加险 险别 包含一般附加险 一切险 承保范围：最大 选择投保特殊附加险 一般附加险 附加险 特殊附加险

34. 6.3 Insurance for Other Transport Modes • Insurance on Air Transported Cargos • Insurance on Air Transported Cargos • Insurance on Parcels and Posts

35. Insurance on Overland Transported Cargos • 1. Overland Transportation Risks • Similar to WPA • 2. Overland Transportation All Risks • Similar to All Risks • Exclusions • W/W Clause • 3. Overland Transportation War Risks (Train)

36. ICC （A）& （B） • ICC （A） Similar to All Risks, CIC • ICC （B） Similar to WPA, CIC

37. ICC （C） • Scope of cover: less than FPA • Covers Principal fortuitous accidents, not all fortuitous accidents

38. Malicious Damage Clause • Scope of cover: • (Mainly) Reimbursement to loss of or damage to Subject-matter caused by intentional acts of those persons other than the Insured • Included in ICC(A)

39. Ⅲ task fulfillment and conclusion • 1. specify the clause and version of the insurance clause • 2. specify the coverage of the insurance • 3. determine the percentage of added value • 4. specify the form of insurance document • 5. using same type of currency

40. Ⅳ knowledge expansion • 1. 保险利益 • 2.伦敦保险业协会海运货物保险

41. Ⅴ Practice • 常州天信外贸有限公司与加拿大客户JAMES BROWN&SONS磋商决定，以发票金额的120%投保ICC（A）险和战争险。请你拟订具体的保险条款。