Freight insurance

I Take out freight insurance. China's export goods are generally insured on a case by case basis. For the export goods concluded on FOB or CFR Terms, the seller has no obligation to apply for cargo insurance. However, before performing the delivery, the seller still bears the risk that the goods may suffer accidental loss during the period from the warehouse to the shipment, and needs to arrange the cargo insurance within this period by itself. For export goods transacted in terms of CIF or CIP, the Seller shall be responsible for handling freight insurance, and shall generally complete the insurance formalities before the goods are transported from the shipping warehouse to the wharf or station. Most of the imported goods in China are covered by open cover. Professional import and export companies or their receiving agents have signed open cover contracts with insurance companies in advance. After signing the contract, the insurance company bears the responsibility of automatic underwriting.

II Determination of insurance amount of freight insurance and calculation of insurance premium:

1. Insured amount of freight insurance. According to the customary practice of the international insurance market, the insurance amount of export goods is generally calculated by adding 10% to the CIF price. The increased 10% is called the insurance premium, that is, the expenses paid by the buyer for this transaction and the expected profit. The formula for calculating the insured amount is:

Insurance amount = CIF value × (1 + addition rate)

2. Freight insurance premium. The insurance premium paid by the applicant in the agreed manner is the condition for the insurance contract to take effect. Premium rate is determined by the insurance company according to different risks and destinations according to the loss rate of different types of goods in a certain period of time. The insurance premium is calculated as per the insurance premium according to the insurance rate table. The calculation formula is: insurance premium = insurance amount × Insurance rate. In China's export business, CFR and CIF are two commonly used terms. Since the insurance premium is calculated on the basis of CIF value, the prices of the two terms shall be converted as follows.

Converted from CIF to CFR price: CFR = CIFX [1 - insurance rate X (1 + markup rate)]

Converted from CFR to CIF price: CIF = CFR / [1 - insurance rate X (1 + markup rate)]

In the import business, it shall be borne according to the open insurance contract signed by both parties. The insurance amount shall be calculated according to the CIF value of the imported goods, without additional deduction. The premium rate shall be calculated according to the average rate specified in the "special rate table"; If the goods are imported FOB, the insurance amount shall be calculated after the average freight rate is converted into CFR value. The calculation formula is as follows:

FOB imported goods: insurance amount = [FOB price x (1 + average freight rate)] / (1 - average insurance rate)

CFR imported goods: insurance amount = CFR price / (1 -- average insurance rate)

III Freight insurance freight insurance documents. There are two forms of insurance documents commonly used in international trade.

1. Insurance policy (insurance policy or policy0, commonly known as large insurance policy). It is the official certificate for the establishment of the insurance contract relationship between the insurer and the insured. Due to the different contents and forms of insurance, the most commonly used forms of marine insurance include ship insurance policy, cargo insurance policy, freight insurance policy, ship owner's liability insurance policy, etc. in addition to specifying the insured, the subject matter of insurance (such as the quantity and mark filled in the cargo section) In addition to the items such as means of transport, type of insurance, place of origin and destination, insurance period, insurance value and insurance amount, detailed clauses on the scope of liability of the insurer and the rights and obligations of the insurer and the insured shall also be attached. If both parties need to add or delete the rights and obligations specified in the insurance policy, they can add clauses or add words to the insurance policy. The insurance policy is the official document for the insured to claim against the insurer or appeal against the insurer, and also the main basis for the insurer to settle the claim. The insurance policy is negotiable and is usually one of the documents that the insured conducts negotiation with the bank. In a CIF contract, an insurance policy is a document that the seller must provide to the buyer.

2. Insurance certificate, commonly known as small policy. It is a document issued by the insurer to the insured to prove that the goods have been insured and the insurance contract has come into effect. There is no insurance clause on the certificate, which indicates that the insurance shall be handled in accordance with the terms of the formal insurance policy of the insurer. The insurance certificate has the same effect as the insurance policy. However, when the letter of Credit stipulates that the insurance policy should be submitted, the simplified form of the insurance policy is generally not allowed.

IV Insurance claim. It refers to the claim made by the insured to the insurer when the insured's goods suffer from the risk loss within the scope of insurance coverage. In international trade, if the insurance is covered by the seller, the Seller shall endorse and transfer the insurance policy to the buyer or its receiving agent after delivery. When the goods arrive at the port of destination (place) and damage is found, the buyer or its receiving agent, as the legal transferee of the insurance policy, shall claim compensation from the insurer or its agent on the spot. Insurance companies have established inspection or claim settlement agencies in more than 100 countries in order to facilitate the timely inspection of losses and compensation on the spot after China's export goods arrive at foreign destinations. As for the inspection claim of imported goods in China, the relevant professional import company or its entrusted receiving agent shall claim compensation from the local insurance company at the port or other receiving place. When the insured or its agent claims against the insurer, the following work shall be done well.

1. When the insured learns or finds that the goods have suffered losses within the scope of insurance liability, he shall promptly notify the insurance company and keep the site as far as possible. The insurer shall carry out inspection together with relevant parties, investigate the extent of loss, investigate the cause of loss, determine the nature and responsibility of loss, take necessary rescue measures, and issue a joint inspection report.

2. When the insured goods arrive at the destination and the insured or his agent finds that the goods have obvious damage marks, the whole package is short or the bulk goods have been damaged when picking up the goods, he shall immediately ask the tallying department for the certificate of damage or short. If the cargo damage involves the liability of a third party, it shall first make a claim to the relevant responsible party or declare the right to claim. Under the condition that the right to claim against the third party is reserved, the insurance company can claim compensation. The insured shall transfer the relevant rights and interests of the damaged goods to the insurance company at the same time of obtaining insurance compensation, so that the insurance company can replace the position of the insured or recover from the third party in the name of the insured. This right of the insurer is called the right of subrogation.

3. Take reasonable rescue measures. After the insured goods are damaged, both the insured and the insurer are responsible for taking possible and reasonable measures to prevent the loss from expanding. The insurance company shall be responsible for compensating the reasonable expenses paid for rescuing, preventing and reducing the loss of goods. If the insured is able to rescue but fails to perform the rescue obligation, the insurer has the right to refuse to compensate for the expanded loss or even the total loss.

4. Prepare the claim evidence and file the claim within the specified time limit. When making an insurance claim, the evidence that should normally be provided is: the original of the insurance policy or insurance certificate; Transport documents; Commercial invoice, weight list and packing list; Inspection report; Certificate of damage and shortage; Letters and telegrams or their supporting documents requesting compensation from the carrier and other third party liable parties; Maritime reports shall also be provided when necessary; The claim list mainly lists the amount of the claim and its calculation basis, as well as the relevant cost items and purposes. According to the practice of international insurance industry, the limitation of insurance claims or actions shall be calculated from the time when the goods are discharged from the means of transport at the last place of discharge, and shall not exceed two years at most.