Block 2. Insurance policy

LEAD-IN

• What is an insurance policy? What contract does it prove?

• What is the difference between a cover note and a policy?

• What kinds of policy do you know?

• Compare insurance policy and cover note (p.544-545, p.559-560).

What are the main features of both? Is there any difference between them?

If any, define it.

When the insurance is arranged between the underwriters (the insurers) and the suppliers (the insured), a cover note is issued to the insured by their insurance underwriters. This brief notice tells the insured that their goods are “covered” and that the insurance policy will soon be issued.

The policy is the principle document and is the instrument embodying the contract. But as the policy may cover a certain period of time, or many shipments of goods. Another document is used called the certificate. This is used for each shipment that is made, the particulars of the consignment are entered on a declaration form and the insurance agents issue the certificate to the senders on behalf of the insurers.

There are various kinds of policy, such as a “voyage” policy, which is used for one voyage only. A “time” policy is used for a period of time.

More commonly used is the “floating” policy which covers large quantities of goods for a period (often for one year). Each shipment requires a separate certificate. There is also an arrangement called “Open Cover”, where all consignments are covered by the insurer.

Marine insurance offers shippers a variety of policies to cover shipments. However, most exporters ship under an all-risk, valued policy which covers them against most eventualities and allows them compensation for loss or damage, plus ten per cent.

The premium is the money paid by the insured for their policy. It is quoted as a percentage. For example, in the UK it is quoted as pence per £100. 75 % is 75p for £100 insured.

FOCUS 1. INSURANCE POLICY

Insured, address Technoimport Havana Cuba	СТРАХОВОЕ АКЦИОНЕРНОЕ ОБЩЕСТВО ИНГОССТРАХ INGOSSTRAKH INSURANCE COMPANY LTD.
	113805, GSP, Moscow, Pjatnitskaja, 12. Account No. 1467444 with Avtobank, Moscow, Lesnaja Street, 41
	INSURANCE POLICY No. 526288 CARGO INSURANCE
Vessel by air with transhipment	Flag AWB No.555-3181 0015 Bill of Lading No. dated 27 May 20… from Moscow, Russian airport to Jose Marti Airport destination to the first buyer’s warehouse in Havana Description of CARGO, Number of Weight packing packages
	Medios de Aviacion			1 case		35 kg
	according to Contract No. 76-90-342 dated 23 Nov 200… L/C BFI-34526
Ingosstrakh Insurance Company Ltd. pursuant to the Transport Insurance Rules insure the GARGO mentioned in this Policy in the sum of (in figures and words) USD 10,036.40 (ten thousand thirty six 40/100) whereof on deck on the following conditions:
			Covering all risks as per Institute Cargo Clauses (A) 1/1/82 except war risks
Validity period of the insurance contract (According to the Rules attached) Order of amendment and cancellation of the insurance contract (According to the Rules attached) Insurance premium as agreed Place of issue Moscow Survey Clause
In the event of a claim under this policy notice shall be given immediately to Ingosstrakh or its Agents, if any at the port of arrival, previous to survey. List of Ingosstrakh Agents see back hereof. Signature of the Insured		According to the Application «27» May 20… of Aviaexport No.46200984765
					Signature