International Insurance

Gustavo Herrera
Mind Map by Gustavo Herrera, updated more than 1 year ago
Gustavo Herrera
Created by Gustavo Herrera about 6 years ago
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Description

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Resource summary

International Insurance
  1. Complexity
    1. Number of coverage

      Annotations:

      • 6 standard incurance policies CLausules
      1. Misunderstood risks
        1. Incoterms rules
          1. Vocabulary

            Attachments:

          2. Perils Faced by Int. Shpmnts.
            1. Pre-carriage

              Annotations:

              • Portion of the trip in the exporting country
              1. Theft

                Annotations:

                • +Pre +On
                1. Pilferage

                  Annotations:

                  • When individuals opportunistically steal cargo (not planned / random).
                  1. Organized theft

                    Annotations:

                    • Carefully planned operations by a group of organized criminals at the entire shipment.
                    1. System´s theft

                      Annotations:

                      • Perpetrated by someone with access to the shipper´s or carrier´s computers, so the remove evidence of the existance of the cargo.
                  2. Main carriage

                    Annotations:

                    • The international portion of the voyage.
                    1. Mayor
                      1. Cargo Movements
                        1. Water damage
                          1. Rain
                            1. Waves
                              1. Container sweat

                                Annotations:

                                • The humidity that condenses on the inside walls of a container and on its cargo
                              2. Overboard losses
                                1. Deck stow collapse

                                  Annotations:

                                  • Stack of containers placed on the deck that collapses in heavy seas.
                                  1. Flotsam

                                    Annotations:

                                    • Cargo that accidentally falls overboard
                                    1. Jetsam

                                      Annotations:

                                      • Cargo that was deliberately jettisoned
                                    2. Jettison

                                      Annotations:

                                      • The act of throwing cargo overboard to save the ship and the remainder of the cargo. ALl parties on board pay for this loss
                                      1. Fire
                                        1. Sinking

                                          Annotations:

                                          • A ship is damaged, no longer floats, and goes to the bottom of the sea.
                                          1. Stranding

                                            Annotations:

                                            • Ship runs into high ground and can no longer move. No direct damage but time and more cargo movements can do that job,
                                            1. General average
                                              1. Piracy

                                                Annotations:

                                                • A violent overtaking of a ship and its crew. Indonesian archipelago Somalia Nigeria Togo Red sea Gulf of Aden
                                              2. Other
                                                1. Collision

                                                  Annotations:

                                                  • Crush -Ships -Containers -Bridge
                                                  1. Cargo contamnated or affected by other cargo
                                                    1. Hidrance to a shipper
                                                      1. Sowaways

                                                        Annotations:

                                                        • A person who hides onboard and travels to the ship destination.
                                                        1. Arrest a ship
                                                          1. Bankruptcy of companies
                                                            1. Civil movements
                                                            2. Air shipments
                                                              1. Cargo movement

                                                                Annotations:

                                                                • Quick accelerations and decelerations, no fly around turbulences.
                                                                1. Theft and pilferage
                                                                  1. Weather
                                                                    1. Takeoff
                                                                  2. On carriage

                                                                    Annotations:

                                                                    • The portion of the importing country.
                                                                  3. Insurable Interest

                                                                    Annotations:

                                                                    • A party who would experience a financial loss in case of a peril.
                                                                    1. Risk management
                                                                      1. Risk Retention

                                                                        Annotations:

                                                                        • The company decides to retain a risk and not insure against it
                                                                        1. Large international traders

                                                                          Annotations:

                                                                          • Selfinsure
                                                                          1. Exporters or importers that have little exposure

                                                                            Annotations:

                                                                            • Small value, small shipments and a loss would not be substancial financial.
                                                                            1. Exporters or importers that have little relative exposure

                                                                              Annotations:

                                                                              • The international transactions represent a very small percentage of their business.
                                                                              1. No a clearly evaluation of risks

                                                                                Annotations:

                                                                                • -Ignorance -
                                                                              2. Risk transfer

                                                                                Annotations:

                                                                                • Transfer risk to an insurance company
                                                                                1. Firms with a lot of exposure
                                                                                  1. Firms witha a relatively high exposure
                                                                                    1. Firms with little experience
                                                                                    2. Mixed Approach

                                                                                      Annotations:

                                                                                      • The firm decides to retain some risk and transfer the rest.
                                                                                      1. Maximum amount of exposure willin to risk, implemented with a deductible.

                                                                                        Annotations:

                                                                                        • Deductible: the amount that the firm is responsable
                                                                                        1. Maximum amount of exposure willin to risk and implement a franchise
                                                                                          1. The firm choses the risks they want to take depending of the type of insurance
                                                                                        2. Insurance Policies
                                                                                          1. Purchasing Marine Cargo Insurance
                                                                                            1. Open Policy

                                                                                              Annotations:

                                                                                              • Insurance contract with which a form insures every international shipment for a period of time.
                                                                                              1. Special cargo Policy

                                                                                                Annotations:

                                                                                                • Insurance policy that covers one shipment.
                                                                                                1. Insurance certificates
                                                                                                  1. Intermediates
                                                                                                    1. Insurance agent

                                                                                                      Annotations:

                                                                                                      • Asist to obtain the most appropriate coverage
                                                                                                      1. Freight forwarder

                                                                                                        Annotations:

                                                                                                        • Provide generic coverage for a given shipment
                                                                                                    2. Coverages
                                                                                                      1. NON-COVER RISKS
                                                                                                        1. Improper packing
                                                                                                          1. Inherent vice

                                                                                                            Annotations:

                                                                                                            • -Rust for iron -Bugs for agricultural or moisture  -Wood split
                                                                                                            1. Ordinary leakage

                                                                                                              Annotations:

                                                                                                              • Evaporation, etc.
                                                                                                              1. Unseaworthy vessel
                                                                                                                1. Nuclear war
                                                                                                                2. Institute Marine Cargo Clauses Coverage A

                                                                                                                  Annotations:

                                                                                                                  • All risk of loss or damage to the subject matter insured. Not includes directly: -Strikes and Civil disturbances. -Acts of war. -Seizure by a goverment
                                                                                                                  1. All risk coverage

                                                                                                                    Annotations:

                                                                                                                    • Shipments must be under deck -Between two developing countries.
                                                                                                                    1. IMCC Coverage B

                                                                                                                      Annotations:

                                                                                                                      • -Good tolerance for bad weather -Not for machines, paper, finished goods, etc.
                                                                                                                      1. IMCC Coverage C

                                                                                                                        Annotations:

                                                                                                                        • -Minimum coverage required for CIF and CIP.
                                                                                                                        1. With-Average Coverage
                                                                                                                          1. Free-of-Particular-Average Coverage
                                                                                                                            1. Clauses
                                                                                                                              1. Strikes coverage

                                                                                                                                Annotations:

                                                                                                                                • Strikes Riots and Civil Commotions (SR & CC). Covers only the direct physical damage to the shipment. Using an amendment
                                                                                                                                1. War and Seizure Coverage

                                                                                                                                  Annotations:

                                                                                                                                  • Free of Capture and Seizure Coverage FC & S Additional policy called "The War Risks Only" 
                                                                                                                                  1. Warehouse to warehouse coverage

                                                                                                                                    Annotations:

                                                                                                                                    • Warehouse-Warehouse (or 15 days after arriving to the destination port, which happens first) Is an extension
                                                                                                                                    1. Difference in conditions

                                                                                                                                      Annotations:

                                                                                                                                      • Caluse that allows an importer to complement the coverage offered by the exporter to the coverage level that the importer wants.
                                                                                                                                      1. General average clause
                                                                                                                                        1. Constructive Total Loss Coverage Clause
                                                                                                                                          1. Sue and labor
                                                                                                                                            1. Inchmaree Clause
                                                                                                                                          2. Other forms
                                                                                                                                            1. Hull insurance

                                                                                                                                              Annotations:

                                                                                                                                              • Contract taken by ship owners to cover the risk of damage of the ship.
                                                                                                                                              1. Protection and indemnity
                                                                                                                                                1. Airfreight Policy
                                                                                                                                              2. Insurance Claim
                                                                                                                                                1. Notification

                                                                                                                                                  Annotations:

                                                                                                                                                  • -Writing -Description of damage -Record of seal number and condition.
                                                                                                                                                  1. Surveyor

                                                                                                                                                    Annotations:

                                                                                                                                                    • Independent company that investigates damage to shipments on behalf of insurance companies.
                                                                                                                                                  2. Protection of damaged cargo

                                                                                                                                                    Annotations:

                                                                                                                                                    • Stop unloading the goods and take several photos. Mark the damaged cargo.
                                                                                                                                                    1. Filling the claim
                                                                                                                                                      1. Timing

                                                                                                                                                        Annotations:

                                                                                                                                                        • 3 days for Ocean Cargo 7 days for air
                                                                                                                                                        1. Documentation
                                                                                                                                                          1. Insurance policy
                                                                                                                                                            1. All bills of landing from origin to final destination
                                                                                                                                                              1. All invoices
                                                                                                                                                                1. Cargo surveyor´s report
                                                                                                                                                                  1. Complete packing list and manifests
                                                                                                                                                                    1. Seal numbers report
                                                                                                                                                                      1. All documents genereated during the voyage of the cargo
                                                                                                                                                                        1. Certificate of Product destroyed or thrown away
                                                                                                                                                                          1. Salvage bids and receipts
                                                                                                                                                                          2. Carrier liability limits
                                                                                                                                                                      2. Lloyd´s

                                                                                                                                                                        Annotations:

                                                                                                                                                                        • Oldest insurance market. Edward Lloyd´s coffee house 1688, intermediary between people that want and provide insurance.
                                                                                                                                                                        1. Commercial Credit Insurance

                                                                                                                                                                          Annotations:

                                                                                                                                                                          • -Foreign customer on an open account basis. -Credit terms.
                                                                                                                                                                          1. Risk involved
                                                                                                                                                                            1. Political risk
                                                                                                                                                                              1. Commercial risk
                                                                                                                                                                              2. Insurance policies avaiable
                                                                                                                                                                                1. Goverment programs
                                                                                                                                                                                  1. Ex-Im Bank
                                                                                                                                                                                    1. Overseas Private Investment Corporation (OPIC)
                                                                                                                                                                                      1. The small business administration (SBA)
                                                                                                                                                                                      2. Private insurance company
                                                                                                                                                                                        1. The Foreign Credit Insurance Association
                                                                                                                                                                                          1. Euler American Credit Indemnity
                                                                                                                                                                                            1. Lloyd´s
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