Савчук. Foreign trade

173

the railway authority as they would with shipping and forwarding agents, who will also see to all insurance formalities.

The senders endorse the consignment notes at the time of forwarding with the words ª Insurance required for pounds¼ º , an amount which should represent, as nearly as possible, the gross value of the goods.

The insurances provide cover against all risks and every risk and all damage or loss, however caused, but excluding delay and inherent vice of the goods, at an inclusive premium.

War risk is always an extra to the ordinary all risks policies.

By air

Here again the air transport organizations and in particular the State corporations, such as British Airways, will undertake to arrange insurance for consignors. This is indicated on the British Airways contract form. The consignment is insured under an open policy against all risks of physical loss or damage, but again excepting those of war risks, etc.

Generally speaking, insurance for all these different forms of transport is the business of the same insurance companies and Lloyd' s. In fact the airlines effect insurance with marine insurance underwriters, and individual shippers can cover their consignments independently in the same way.

By sea

Here the most complicated form of insurance comes into operation, this is called marine insurance, which covers ships and their cargoes.

Marine insurance is very old and in the course of time has collected some rather strange terminology and a large number of conditions.

Correspondence

The senders of the shipment of cycles from London to Malta would write to their insurance agents and ask for a rate of insurance ± that is to say, the premium they will have to pay.

(1)Enquiry for insurance rate:

Dear Sirs,

Please quote us a rate for the insurance against all risks, warehouse to warehouse, of a shipment of 6 (six) cases of cycles, London to Valetta, by M. V. Morecombe of the Blue Crescent Line. The value is ¼ pounds.

The insurance is needed as from 15 April.

Yours faithfully,

174

When they have been informed of the rate, the senders will instruct the insurance agents to effect insurance. If the senders have a floating policy the basic rates will probably have been agreed and they need not ask for a rate, unless special circumstances are involved.

(2) Senders’ instructions to insurance agents to effect insurance:

Dear Sirs,

We confirm our telegram of today, a copy of which is enclosed, and would be glad if you would cover us against all risks, warehouse to warehouse, to the value of ¼ pounds. On 12 (twelve) cased cycles, London ± Malta, by M. V. Morecombe of the Blue Crescent Line. The certificate must reach us by the 17th at the latest, since it has to be presented with the other documents to the bank with which a letter of credit has been opened.

We look forward to your early acknowledgement.

Yours faithfully,

INSURANCE CLAIMS

As soon as the consignees receive delivery of the consignment, or collect it from the port, airport or goods station agreed on, they must inspect the goods; this should be done without delay, otherwise their claim on the insurers may be jeopardized. However, it is not enough for the buyers to inspect the goods, if damage is discovered; the insurance companies and Lloyd' s will not pay compensation unless they receive a report on the damage from a properly qualified and disinterested person. Such a person is called an insurance surveyor, and in large centers there are, of course, several surveyors. If the surveyor is employed by Lloyd' s then he is a Lloyd' s surveyor.

The receivers of the goods call in the surveyor to inspect the packing ± cases, crates, casks, etc. ± and the contents, and to report on the nature and extent of the damage. If the insurance companies and Lloyd' s did not require such a report they would soon be out of business, because it would be very easy for buyers to say that the goods had arrived damaged and then put in a claim for compensation.

The buyers also report the damage to the sellers. If, as is probably the case, they are not able to sell the damaged goods, they usually ask for replacements. For these they will have to pay separately, setting the amount of the indemnification against this additional payment to be made. In some cases they may be able to sell

175

the goods at a considerably reduced price, as, for example, if the articles have been scratched or chipped; if materials have been spoiled by sea water, fresh water, oil or other stains, part of the material, perhaps, be cut off and the rest sold.

(3) From consignees to senders, reporting damage:

Dear Sirs,

When the S. S. Elinor Ferguson arrived at Port-of-Spain yesterday the ship' s agents noticed that case # 14 was damaged, and notified us accordingly. We immediately had the case opened and examined by Lloyd' s agent here.

The number of articles in the case tallies with the packing list, but the following are broken:

(list of broken articles)

We enclose copies of the report of the survey and of declaration by the ship' s agents to the effect that the damage was noticed when the case was unloaded.

As you hold the policy, we would be obliged if you would kindly take the matter up with the underwriters, on our behalf; the number of the insurance certificate is, as you know, 473794.

In the meantime we will be glad if you will send us replacements for the broken articles as soon as possible, as we have to complete deliveries to our own customers.

We hope to hear from you shortly.

Yours faithfully,

Note two points in connection with the above letter:

1.Was the B/L clean? If so, the shipowners accepted the case as ª in good conditionº , or as ª in apparent good conditionº , and are therefore liable; if they contend that the damage was owing to insufficiently strong packing, they should have claused the B/L to that effect when they accepted the consignment for shipment. It is , however, possible that the surveyor may report that the articles were packed, which would not be apparent from an outside inspection of the cases, so that the shipowners may claim the damage was due to negligence and not to any fault of theirs.

2.The same must have been on C.I.F. terms, and the sellers arranged the insurance, sending a certificate to the buyers. As the insurance is evidently of the type known as floating the sellers will continue to hold the policy, which

176

must be produced to the insurers when a claim is made, as the amount of the claim is endorsed on the policy.

If the sale had been F. O. B. or C. & F. the buyers would have arranged insurance themselves, and the letter would be differently worded at the end, probably as follows:

Alternative fourth paragraph for letter # 3:

ª We are making a claim on our insurance company and will let you know the result in due courseº .

Match the English and Russian equivalents:

Extract from the transport insurance rules of Ingosstrakh:

1. General Stipulations

1. Upravlenie Inostrannogo Strakhovanija R. F. (Ingosstrakh) accepts in accordance with these Rules for insurance cargoes and also anticipated profit and commission, freight and expenses connected with the carriage of cargo.

2. Extent of Liability

2. Under insurance contracts concluded in accordance with these Rules are indemnified losses arising from fortuitous accidents and perils of the carriage.

The insurance contract may be concluded on the basis of one of the following conditions:

A. ª All risksº

Under an insurance contract concluded on this condition are indemnified irrespective of percentage:

177

(a)losses due to damage to or total loss of the whole or part of the cargo arising from all perils except those specified in the items ª aº ± ª iº of the p. 6 of the Rules;

(b)losses, expenses and contributions allowed in general average;

(c)any necessary and properly incurred expenses for the salvage of the cargo and also for minimizing the loss and ascertaining its extent, if the loss is indemnified in accordance with insurance conditions.

B. ª With particular average' .

Under an insurance contract concluded on this condition are indemnified:

(a)losses due to damage to or total loss of the whole or part of the cargo caused by fire, lightning, storm, whirlwind and other elemental disasters, stranding or collision of vessels, aircraft and other means of transport with each other or by contact with any fixed or floating objects, grounding, collapsing of bridges, explosion, damage to the vessel by ice, wetting by sea or river water and also owing to measures taken for salvage and extinction of fire;

(b)losses in consequence of the vessel or aircraft being missing;

(c)losses due to damage to or total loss of the whole or part of the cargo in consequence of accidents in loading, stowage and discharge of the cargo and taking in fuel by the vessel;

(d)losses, expenses and contributions allowed in general average;

(e)any necessary and properly incurred expenses for the salvage of the cargo and also for minimizing the loss and ascertaining its extent, if the loss is indemnified in accordance with insurance conditions.

Remark. In the case of carriage of cargoes by sea, losses due to damage are not indemnified if they are under 3 % (three per cent) of the insured amount of the whole cargo under one B/L, and when the cargo is in lighters, barges and other delivering vessels ± of the insured amount of the cargo in each vessel. This limitation is not applied in case of general average or when the loss is due to stranding or collision of the vessel with another vessel or with any fixed or floating objects (including ice), grounding, fire or explosion on shipboard.

C. ª Free from particular averageº .

Under the insurance contract concluded on this condition are indemnified:

(a)losses due to total loss of the whole or part of the cargo caused by fire, lighting, storm, whirlwind and other elemental disasters, stranding or collision of vessels, aircraft and other means of transport with each other by contact with any fixed or floating objects, grounding, collapsing of bridges, explosion, damage to the vessel by ice, wetting by sea or river water and also owing to measures taken for salvage and extinction of fire;

(b)losses in consequence of the vessel or aircraft being missing;

178

(c)losses due to total loss of the whole or part of the cargo in consequence of accidents in loading, stowage and discharge of the cargo and in taking in fuel by the vessel;

(d)losses due to damage to the cargo caused by stranding or collision of vessels, aircraft and other means of transport with each other or with any fixed or floating objects (including ice), grounding, fire or explosion on shipboard, aircraft or other means of transport;

(e)losses, expenses and contributions allowed in general average;

(f)any necessary and properly incurred expenses for the salvage of the cargo and also for minimizing the loss and ascertaining its extent if the loss is indemnified in accordance with insurance conditions.

3.The liability under the insurance contract begins from the time when the cargo is taken from the warehouse at the place of shipment for transport and continues during the whole transport (including reloading and transshipments as well storage in warehouses at the places of reloading and transshipments) until the cargo is delivered into warehouse of the Consignee or into another warehouse at the place of destination named in the policy, but not exceeding 60 days after discharge of the cargo from the oversea vessel at the final port of discharge.

4.During the delivery of the cargo in lighters, barges and other delivering vessels Ingosstrakh bears liability only if the use of such vessels is common according to local conditions.

5.Losses due to death or mortality of animals and fowls or accidents to them, due to leakage and strewing of cargo, breakage of glass, porcelain, pottery, ceramics, marble and articles made thereof, bricks of every kind, millstones, grindstones, and lithographic stones, graphite crucibles, electrodes and other objects liable to breakage under insurance on the conditions specified in the items 2 and 3 of the p. 2 of the Rules are indemnified only when such losses have arisen in consequence of the wreck of the vessel or any other means of transport.

6.Losses arising in consequence of the following are not to be indemnified:

(a)warlike operations or warlike measures of any nature and consequences thereof,

damage or destruction by mines, torpedoes, bombs and other engines of war, actions of pirates and also in consequence of civil war, people' s commotions and strikes, confiscations, requisition, arrest or destruction of cargoes by order of military or civil authorities;

(b)direct or indirect effect of atomic explosion; radiation and radioactive contamination arising from any use of the atomic energy and utilization of fissile materials;

(c)malice or gross negligence of the insured or beneficiary or their representatives and also consequence of infringement by any one of them of the prescribed rules of carriage, sending and storage of cargoes;

179

(d)effect of temperature, of the air in the hold or of specific properties of the cargo including drying up;

(e)improper packing or corking of cargoes and the shipping of cargoes in damaged condition;

(f)fire or explosion in consequence of the loading with the knowledge of the insured or of the beneficiary or of their representatives, but without Ingosstrakh' s knowledge, of substances and objects dangerous in respect of explosion or spontaneous combustion;

(g)shortage of cargo while the outer packing is intact;

(h)damage to cargo by worms, rodents and insects;

(i)delay in the delivery of cargoes and falls in prices, neither are indemnified any indirect losses of the insured except cases when, in accordance with the insurance conditions, such losses are subject to indemnification in general

average.

Under the insurance contracts concluded on the conditions specified in items B and C of the p. 2 of the Rules, are not to be indemnified also losses arising from:

(j)flood and earthquake;

(k)sweating of the hold and wetting of cargoes by atmospheric precipitations;

(l)depreciation of the cargo in consequence of contamination or damage to packing while the outer packing remains intact;

(m)jettison and washing overboard of the deck cargo or of cargo carried by deckless vessels;

(n)theft or non-delivery of cargo.

7.By agreement between the parties the insurance conditions stated in p. 2 of the Rules may be modified, amplified or replaced by other conditions generally used in insurance practice.

In particular, Ingosstrakh' s liability for losses enumerated in item ª aº of p. 6 of the rules, liability during the storage of the cargo in warehouses at the place of shipment awaiting loading and in the place of destination after discharge may be included; the terms of liability as provided in p. 3 of the Rules may also be altered. When insuring under conditions stated in items 2 and 3 of p. 2 of the Rules the liability of Ingosstrakh for losses arising from causes enumerated in items ª jº , ª kº , ª lº , ª mº , ª nº of p. 6 of the Rules may be included and the liability for losses specified in p. 5 of the Rules may be extended.

LLOYD' S

This is the name of the greatest insurance organization in the world, but it acquired this name in a rather unusual way; Mr Edward Lloyd kept a coffee house in the City of London, in the eighteenth century, and there the underwriters used to meet because it was a good center for news concerning ships. Later in the same

180

century, after several changes of home, the underwriters occupied the third building of the Royal Exchange (earlier buildings having been destroyed by fire), and organized their business under a Committee of their members. In 1928 they moved to a big new building in Leadenhall Street, and as this soon became too small an extension was built and opened in 1958.

Lloyd' s is not an insurance company or corporation; the members work as individuals, though usually in syndicates. To become a Lloyd' s underwriter it is necessary to be approved by the Committee and to pay a very large sum as entrance fee as well as an annual subscription. Lloyd' underwriters are not allowed limited liability, but in the rare cases of failure (as also in the London Stock Exchange) the insured are not allowed to suffer and the Committee pays the outstanding claims.

As the result of the marine insurance business, Lloyd' s branched out into shipping intelligence, and Lloyd' s List is published every day, giving the movements of ships and information of ª casualtiesº . Lloyd' s Register, published every year, contains information regarding ships themselves: age, nationality, owners, build, tonnage and classification of all ships surveyed by Lloyd' s and conforming to its rules. The classification ª A 1 ± 100 Lloyd' s is a guarantee to any prospective purchaser or charterer that the vessel is in good condition and thoroughly seaworthy.

Supply one suitable word for each space:

___ insurance is the branch ___ insurance of ships and their ___. It is perhaps ___ oldest kind of ___.

This type of ___ is undertaken in Great ___ by ___' s underwriters, marine insurance ___ and marine ___ brokers. Brokers ___ usually employed by ___ to approach Lloyd' s ___ in order ___ obtain the cover.

Marine ___ can be provided either for a specified ___ of time ___ a particular ___. All ___ terms and premium are ___ in the ___ policy. The ships and

___ may be insured ___ total or ___ loss. The term ___ is used in insurance ___

mean loss.

In ___ of mishap at sea the ___ and cargo can be ___, the ship can ___

damaged, some cargo can be ___ to save the ship and other ___.

FORM OF LLOYD' S MARINE POLICY

BE IT KNOWN THAT¼ ¼ ..as well in ¼ .. own name as for and in the name and names of all and every other person or persons to whom the same doth, may, or shall appertain, in part or in all doth make assurance and cause ¼ ¼ ¼ ¼ ¼ and them, and every of them, to be insured lost or not lost, at and from ¼ ¼ . Upon any

181

kind of goods and merchandises, and also upon the body, tackle, apparel, ordnance, munition, artillery, boat, and other furniture, of and in the good ship or vessel called the ¼ ¼ . Whereof is master under God, for this present voyage,¼ .. or who so ever else shall go for master in the said ship, or by whatsoever other name or names the said ship, or the master thereof, is or shall be named or called; beginning the adventure upon the said goods and merchandises from the loading thereof aboard the said ship, ¼ ..upon the said ship, & c¼ ¼ ¼ ¼ ¼ . And so shall continue and endure, during her abode there, upon the said ship, & c. And further, until the said ship, with all her ordinance, tackle, apparel, & c., and goods and merchandises whatsoever shall be arrived at¼ ¼ .upon the said ship, & until she hath moored at anchor twenty-four hours in good safety: and upon the goods and merchandises, until the same be there discharged and safely landed. And it shall be lawful for the said ship, & c., in this voyage, to proceed and sail to and touch and stay at any ports or places whatsoever ¼ ¼ . Without prejudice to this insurance. The said ship, & c., goods and merchandises, & c., for so much as concerns the assured by agreement between the assured and assurers in this policy, are and shall be valued at ¼ ¼ ¼ ¼ ¼ ¼

Touching the adventures and perils which we the assurers are contented to dear and do take upon us in this voyage; they are of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart and countermart, surprisals, takings at sea, arrests, restraints, and detainments of all kinds, prices, and people, of what nation, condition, or quality so ever, barratry of the master and mariners, and of all other perils, losses, and misfortunes, that have or shall come to the hurt, detriment, or damage of the said goods and merchandises, and ship, & c., or any part thereof. And in case of any loss or misfortune it shall be lawful to the assured, their factors, servants and assigns, to sue, labour, and travel for, in and about the defense, safeguards, and recovery of the said goods and merchandises, and ship, & c., or any part thereof, without prejudice to this insurance; to the charges whereof, we, the assurers, will contribute each one according to the rate and quantity of his sum herein assured. And it is especially declared and agreed that no acts of the insurer or insured in recovering, saving, or preserving the property insured shall be considered as a waiver, or acceptance of abandonment. And it is agreed by us, the insurers, that this writing of policy of assurance shall be of as much force and effect as the surest writing or policy of assurance heretofore made in Lombard Street, or in the Royal Exchange, or elsewhere in London. And so we, the assurers, are contented, and do hereby promise and bind ourselves, each one for his own part, our heirs, executors, and goods to the assured, their executors, administrators, and assigns, for true performance of the premises, confessing ourselves paid the consideration due unto us for this assurance by the assured, at and after the rate of¼ ..

182

IN WITNESS whereof we, the assurers, have subscribed out names and sums assured in London.

N. B. Corn, fish, salt, fruit, flour, and seed are warranted free from average, unless general, or the ship be stranded ± sugar, tobacco, hemp, flax, hides and skins are warranted free from average, under five pounds per cent, and all other goods, also the ship and freight, are warranted free from average, under three pounds per cent unless general, or the ship be stranded.

Answer the following questions:

1.What is the process of insurance?

2.What is particular average?

3.What is general average?

4.What is an insurer?

5.What documents are used in insurance?

6.What is Lloyd' s?

7.What are the York Antwerp Rules?

8.What is premium?

9.When do insurance claims occur?

10.What do you know about marine insurance of the goods?

BUSINESS TALKS

Act as an interpreter:

A: " ' -

- ?

#: Of course I can help you. What exactly are you interested in?

A: % ' - %

?

#: Under the contract of marine insurance the insurer undertakes, against a specified payment (insurance premium), if the perils or accidents covered by the contract of marine insurance occur, to which the object of insurance is exposed (insured event), to indemnity the insured or other person, to whose benefit the contract was concluded (beneficiary), for losses incurred.

A: " 1 6 - ?